The EAM Global Small Companies Fund has been added to the HUB24 platform from 1 July, giving investors greater access to opportunities in global small cap companies. It is the fourth platform that the fund has been listed on since it was launched in Australia late last year, following Praemium, Powerwrap and Mason Stevens. The fund is managed in partnership with EAM Global Investors (EAM) and distributed exclusively in Australia by SG Hiscock & Company (SGH).
“We are seeing growing interest in global small caps, as this part of the market continues to perform well. It offers investors good diversification from the large cap sector, which has been dominated by a handful of companies and carries increasing levels of risk” said Anthony Cochran, head of distribution at SGH.
“EAM Global Investors has a proven track record of delivering strong risk adjusted outcomes for investors,” Mr Cochran said.
The EAM Global Small Companies Fund seeks to deliver consistent alpha using EAM’s Informed Momentum® approach to investing in global small cap companies. EAM has utilised this same investment process across all its equity strategies since inception of the firm in 2007.
The fund aims to provide investors with capital appreciation by investing in stocks generally within the market cap range of the MSCI ACWI Small Cap Index (ex-Australia) across 22 Developed Markets countries and 25 Emerging Markets countries. The portfolio consists of 100-150 holdings, with an adaptable stock selection process designed to capture opportunities across geographies (excluding Australia), industries, and traditional styles.
Travis Prentice, portfolio manager of the EAM Global Small Company strategy and CIO of EAM, says the fund has benefited recently from its holdings in the US, Korea and India, with momentum exposure and stock selection proving key to performance.
So far in 2024, the strength of the market has predominantly come from a few key players in large cap. Small caps can offer differentiated exposures to offset the increasing concentration risks in many portfolios. Additionally, a supportive macro backdrop could mean relative outperformance on the horizon. Less uncertainty around interest rates, improving earnings growth and accelerating M&A should be tailwinds for small cap.
“We are seeing an amazing level of concentration in the larger end of the market, while there remains a diverse set of compelling opportunities in the small cap space for stock pickers like us,” Mr Prentice says.
The EAM Global Small Companies Fund has returned 13.59 per cent since inception in 2023 after fees compared to 6.81 per cent for its benchmark, the MSCI ACWI Small Cap Index (ex-Australia). In the first half of 2024, the fund gained 17.82 per cent net of fees, while its benchmark returned 4.56 per cent for the period.
