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Mr Nicholson acknowledged the fund had not completely avoided the recent wider market decline, but said it had outperformed, largely due to its focus on high-quality growth companies.

"Current market conditions offer up a great opportunity for buying into companies at very attractive valuations," he said.

As examples, he gave Gemalto, a French smart-card company, and Grifols, a Spanish blood plasma firm, both of which have reportedly been up by 20 per cent since the beginning of this year.

The fund invests in a diversified portfolio of European smaller companies and is aimed at both European institutional and retail investors.

According to SLI, the untapped potential of Europe’s smaller companies presents an opportunity for investors to benefit by investing in the fund.

Mr Nicholson said: “The European smaller companies sector is worth around €1.4trn and with more than 1350 companies in more than 20 sectors and 16 countries, it has so much to offer investors - most especially those with a medium to long-term investment view. A lot of the companies in the sector are under-researched and are world leaders in what they do.”

SLI said its decision to enter the European small-cap arena during the last year follows a decade-long record of good returns backed by its long-standing experience of researching the smaller companies market.

Jacqueline Kerr, SLI’s head of mutual fund investments, said: “This insight, the proven capability we have in European equities and the robust, repeatable and well-proven investment process we have in place at SLI will continue to benefit investors in the European Smaller Companies Sicav fund."