Threadneedle American Smaller Companies is the best-performing fund in the Investment Management Association (IMA) North American Smaller Companies sector over three and five years. This is in line with the fund's aims for long-term capital growth, although it has also beaten its index, the S&P MidCap 400, over one, three and five years.
Threadneedle says the fund may be of interest to experienced investors seeking to diversify their growth portfolios.
The fund is managed by Threadneedle's head of US Equities, Cormac Weldon, who uses the same fundamental investment process as Threadneedle's other US equity products. The portfolio incorporates research ideas from across the company's US team.
Mr Weldon and his investment team use thematic and macro analysis, drawing on regional equity and fixed-income teams. This is combined with bottom-up stock selection to identify the best companies in the prevailing economic background. They examine operating and financial models to identify opportunities and risks facing the businesses. These are quantified as upside and downside price targets to help set appropriate position sizes in the fund.
The investment team meets around 500 businesses each year in its efforts to uncover under-appreciated opportunities.
Mr Weldon and his team are supported by an independent risk management function and say that their approach to assessing upside and downside risk is particularly useful for smaller companies portfolios. This includes monitoring the contribution of active positions to tracking error so they can assess how a position change will impact performance.
The portfolio typically consists of 50 to 70 stocks, most of which have market capitalisations between $1bn and $5bn. The fund is overweight industrials, more than 7 per cent relative to its index, and more than 6 per cent overweight technology.
Full data and a PDF factsheet for Threadneedle American Smaller Companies Fund can be found here.
THREADNEEDLE AMERICAN SMALLER COMPANIES FUND (ADASCG)
|SIZE OF FUND:||198.7m*|
|No. OF HOLDINGS:||72*|
14 November 1997
|MANAGER START DATE:|
TOTAL EXPENSE RATIO:
Initial 3.75%, annual 1.5%
Source: Investors Chronicle & *Theadneedle.
Performance data as at 1.01.10
Top 10 holdings as at 30 September 2010
|Affiliated Managers Group||2.1|
|SL Green Realty||2.0|