Allianz Global Investors has announced the launch of the Allianz US Small Cap Equity fund. Managed by a San Diego-based team, it will be headed up by John McCraw and a team of four portfolio managers.
It is the second small-cap fund the group has launched this year, following an Asia-focused fund in May.
It is actively managed with a bottom-up strategy which focuses on US companies with a market capitalisation of between $100m and $3bn. The fund will hold roughly 130 stocks and will be benchmarked against the Russell 2000 Growth index.
The new fund mirrors an existing strategy used on the Allianz GI US Small Cap Growth fund which has outperformed the benchmark since inception in 1993. Its largest allocation is to the information technology sector, with a 23 per cent holding.
The fund will have access to stocks that will become tomorrow’s mid- and large-cap winners as the investment universe is so large. So the managers will be looking to seize the best opportunities in the technology, healthcare, consumer and energy companies.
The fund will carry more risk than a large-cap counterpart, which the firm says will make an “attractive part” of a portfolio. The fund’s annual charge will be 0.88 per cent and it will be distributed through the Allianz Global Investors fund vehicle.
www.allianzglobalinvestors.co.uk
Comment:
The US has traditionally been a difficult space for UK investors to invest.
Funds typically have never performed or sold particularly well and despite the enormity of the investment universe, it has been tough to track down the best performers.
This fund looks specifically at small-cap stocks, and follows the Russell 2000 Growth index – which has 2,000 constituents for the managers to choose from – narrowing it down to around 130 stocks.
It is worth keeping in mind that small-caps in the US are not of a similar size to UK small-caps. In fact, it is almost the opposite. US small-caps tend to be around the same size as UK large- and mid-caps. So you could theoretically be investing in FTSE 100-sized firm.
Even though small-caps tend to carry more risk than large-caps, it is worth looking at this fund to develop a more diverse portfolio.
The fact that this fund is a mirror of an already well-established and high performing fund is an additional benefit.
The fund management team is based in San Diego, so will be on the ground and having immediate access to the companies it can invest in rather than suffering the time zone issues that London-based teams who invest in the US can have.
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