POWERED BY MOMENTUM MEDIA
(March-2002) Small caps make big splash
Small cap funds are becoming the flavour of the month, with both BT and Ausbil Dexia launching new funds and Perennial about to join them.
Perennial’s CEO Ian Maccoun confirms his group is on the verge of releasing its own small caps fund. “We have an established value-style small caps fund ready to go, but it hasn’t yet been seeded,” he says. “Once it has a substantial investor, we’ll open it.”
This fund will be run as a pooled fund with a minimum investment of $50,000.
BT’s Australian Small Cap Fund, which will be run by former ING small caps managers Ben Griffiths and Brian Eley, was launched ahead of what Eley describes as an expected “economic strengthening in the latter half of the year”.
“Small cap funds seem to be leveraged to recovery better,” he says.
To manage its wholesale small cap fund, Ausbil has brought in European investment specialist Jop Werle from Dutch banking group Kempen & Co, acquired by Dexia last year for $1.7 billion.
Ausbil CEO Reub Hayes does not believe that small caps are really ‘hot’ at the moment. Rather, he says, there is a “sweet spot” in mid and small stocks.
“It’s very difficult to add value from the top 50 stocks of the top 100,” he says. “But a lot of value has been coming out of the second 50 of the 100. This is a worldwide phenomenon.”
Hayes also doesn’t believe the small caps area of investment is untapped.
“There are probably about half a dozen good managers of small caps, while others are nearing their capacity restraints. This is a reason why there’s room for a few more,” he says.
Maccoun, however, is wary of fund managers that jump on the small caps bandwagon.
“Good small caps managers are excellent, whereas you can get caught badly if you do a poor job. You really have to be very careful to be successful. But there are nonetheless very good opportunities in that section of the market and good returns,” he says.
Recommended for you
The corporate regulator has launched civil proceedings against Equity Trustees over its inclusion of the Shield Master Fund on super platforms it hosted, but other trustees could also be in the firing line.
The shadow minister for financial services says reworking the superannuation performance test to allow investment in house and clean energy risks turning super into a ‘slush fund’ for government.
Australia’s superannuation sector has expanded strongly over the June quarter, with assets, contributions, and benefit payments all recording notable increases.
The Super Members Council (SMC) has called on the government to urgently legislate payday super, warning that delays will further undermine the retirement savings of Australian women.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
