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US Smaller Companies Equity
The US small and mid-cap universe represents a diverse mix of businesses – from established industry leaders to new and innovative “micro-caps” – whose strengths often remain underappreciated, or even unknown, by the broader investment community.
Three reasons to consider this strategy
Opportunity:
We look for underfollowed companies possessing attractive fundamentals where identification of a “value creation” catalyst is key.
Flexibility:
We seek to invest in the most attractive opportunities across the small-/mid-cap universe from deep value to aggressive growth companies.
Diversification:
The portfolio maintains a blend of value and growth stocks, broadly diversified among sectors and industries seeking to limit volatility.
US Smaller Companies Equity
An actively managed, widely diversified portfolio of around 150 to 200 smaller cap companies in the US, with a core style orientation that maintains broad exposure to both growth and value stocks.
Download our fund materials
General Portfolio Risks. Capital risk – the value of your investment will vary and is not guaranteed. It will be affected by changes in the exchange rate between the base currency of the portfolio and the currency in which you subscribed, if different. Equity risk – in general, equities involve higher risks than bonds or money market instruments. Geographic concentration risk – to the extent that a portfolio invests a large portion of its assets in a particular geographic area, its performance will be more strongly affected by events within that area. Hedging risk – a portfolio's attempts to reduce or eliminate certain risks through hedging may not work as intended. Investment portfolio risk – investing in portfolios involves certain risks an investor would not face if investing in markets directly. Management risk – the investment manager or its designees may at times find their obligations to a portfolio to be in conflict with their obligations to other investment portfolios they manage (although in such cases, all portfolios will be dealt with equitably). Operational risk – operational failures could lead to disruptions of portfolio operations or financial losses.
Sign up for further US Equities insights including:
- What investors can learn from past election cycles
- What the future holds for US equity investors
- Could 2024 prove to be a turning point for US small caps?
Smaller-cap valuations have been relatively attractive versus their large cap peers for some time now. But valuation alone is not a catalyst for outperformance. You need valuation, but you also need fundamentals. Over the coming years, we’ve seen an inflection in small-cap fundamentals as industries like industrials and the energy complex improve relative to the past. Those inflecting fundamentals support many of the smaller companies and in aggregate will help small-cap earnings on a relative basis versus their large-cap peers, providing a tailwind to the fundamentals for these businesses. Today, we're finding attractive opportunities in the energy complex as falling energy productivity, the unwinding of the shale revolution, is creating the need for greater investment in the energy industry, and in suppliers that help combat falling productivity. As well, we're finding attractive areas of opportunity in health care, as the next generation of medicine takes hold in some of the most innovative companies that are driving that change. We're seeing an extreme bifurcation where parts of a given industry are performing very well, as in the AI companies within the semiconductor universe. But within semiconductors, there's also parts that are experiencing deeply recessionary volumes, like analog and microcontrollers and diodes.
Two questions on US equities with…Matt Mahon
Portfolio Manager Matt Mahon discusses his outlook and expectations for US smaller companies
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