American Century Investments and Nomura Asset Management collaborate on new Global Small Cap Equity Fund
American Century Investments (ACI) and Nomura Asset Management (NAM) have launched the Nomura Funds Ireland - American Century Global Small Cap Equity Fund, which aims to deliver long-term capital growth by investing primarily in small-cap companies in both developed and emerging economies.
The new UCITS fund is a response to growing client demand for small cap exposure as part of more broadly diversified portfolios.
The American Century Global Small Cap Equity Fund will be added as a sub-fund to the Nomura Funds Ireland platform, which currently has USD7.6 billion in assets under management.
The fund will be managed by American Century Investments’ Senior Portfolio Manager Trevor Gurwich (pictured) and Portfolio Manager Federico Laffan. Gurwich was a key architect of another small cap portfolio, American Century’s Global ex-US Small Cap strategy, which he has managed since 2001. Gurwich and Laffan have worked together for more than 10 years and are supported by a well-resourced team of eight analysts. The investment team meets with more than 2,000 companies annually and manages USD2.3 billion in small cap assets.
The fund employs a bottom-up growth philosophy focused on identifying investments in small cap companies around the world exhibiting sustainable and accelerating earnings growth. The team believes that the direction of earnings growth is a more powerful predictor of stock price performance than the absolute level of growth. The team integrates ESG (environmental, social and governance) factors into the fundamental analysis.
The American Century Global Small Cap Equity Fund is managed under the UN Global Compact guidelines and will not invest in companies that are on the exclusion list recommended by the Council on Ethics of the Norwegian Government Pensions Fund Global.
Gurwich says: “The small cap markets provide a dynamic and large universe. In general, global small caps are expected to grow earnings faster than their large cap peers, and global small cap valuations remain attractive. Our portfolio will be positioned in companies that we believe have strong fundamentals and will continue to deliver better earnings revisions than the overall market. We also believe combining global small caps with either global large caps or regional mandates may improve diversification and enhance long-term returns.”
Peter Ball, Managing Director at NAM UK, says: “We are excited to launch the Global Small Cap Equity Fund with American Century. Since entering into this strategic business partnership in 2016, both firms have been able to leverage each other’s strengths for the benefit of clients around the world. Partnering with ACI’s distribution team, Nomura will leverage its distribution and client relations expertise, to provide this new investment solution to clients.”
Jamie Downing, Managing Director EMEA (Europe, Middle East, Africa) at ACI, says: “We are thrilled to work with our strategic partner on this effort. Our decision to offer our Global Small Cap Equity Fund, as part of Nomura’s UCITS range, increases our ability to help clients construct robust portfolios to meet their investment objectives. Over the last two decades, American Century has built an experienced team of small cap experts to manage our growing capabilities and respond to our clients’ evolving preferences.”