Global Small Cap Fund Launches in Australia
FOR INFORMATIONAL PURPOSES ONLY. PRODUCT ONLY AVAILABLE IN AUSTRALIA.
American Century Investments® has reinforced its commitment to the Australian market with the launch of its American Century Global Small Cap Fund via a unit trust structure, making it available to local wholesale investors.
The Fund is an actively managed portfolio predominantly comprised of listed global small cap equities. The strategy uses a fundamental, bottom-up investment process aimed to provide superior risk-adjusted returns over the long-term.
American Century's investment philosophy of growth investing is centered on the belief that accelerating, sustainable growth in revenues and earnings, driven by an inflection in business fundamentals, results in stock price outperformance. It also believes the direction of earnings growth is a more powerful predictor of stock price performance than the absolute level of growth. Its process is designed to uncover stocks with potential to outperform as earnings growth accelerates, market expectations rise, and multiples expand.
Senior portfolio manager of the small cap strategy, Trevor Gurwich, says the Fund provides Australian investors with additional investment opportunities that they may not be able to access on their own.
"We believe our differentiated growth approach is well suited to global small cap investing. We also benefit from a well-resourced, experienced team."
"We utilize a distinct approach to growth investing which we believe takes advantage of persistent market inefficiencies and opens up a broader set of opportunities than a traditional growth approach."
"It is an opportune time to be launching the Fund in the Australian market, particularly given the positive outlook for small cap earnings growth and attractive small cap valuations relative to large caps."
The investment objective of the Fund is to achieve long-term capital growth through investment in an actively managed portfolio of equity securities issued by small capitalisation companies in both developed and emerging countries. Its benchmark is the MSCI ACWI Small Cap Net ($AUD) Index, and the minimum suggested time frame for investment is at least five years.
The Fund takes into account material ESG issues and corporate governance practices and seeks to avoid companies that do not meet fundamental responsibilities, including in areas such as human rights, labour, environment, and anti-corruption as well as avoiding companies with exposure to controversial weapons, cluster munitions, and tobacco.
Mr. Gurwich says that as the global economy continues to recover from the impacts of COVID, there are some thematics which play into the hands of global small caps and investment portfolios are shifting accordingly.
"The stay-at-home thematic within small cap stocks is becoming less prevalent as people seek a return to normality and in-person experiences."
"Global small caps poised to benefit from the return to normality include travel and leisure companies, albeit the emergence of the Omicron variant has created hesitancy. We also see continued demand for robust IT spending, with companies realizing that IT investment is critical to their success in a hybrid world. Our bottom-up process is identifying well-run, small cap technology companies that are direct beneficiaries of that increased spending."
"The small cap sector continues to provide many attractive stock selection opportunities. There will certainly be obstacles on the way to economic recovery, but they will more likely be speed bumps, not roadblocks," he said.
American Century Investments introduced its first strategies for Australian investors in 2009 and opened an Australian office in 2018, according to Interim Head of Asia Pacific Elizabeth Trinh.
"The firm is committed to an investor-type diversification strategy and currently manages almost A$3 billion on behalf of Australian institutional and intermediary investors. Since 2009, we have offered Global Growth and Healthcare Impact funds to intermediary investors through a distribution relationship with Zurich Investments."
About American Century Investments
Who We Are
American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting breakthrough medical research.
Founded in 1958, American Century Investments' 1,400 employees serve financial professionals, institutions, corporations and individual investors from offices in Kansas City, Missouri; New York; Los Angeles; Santa Clara, California; Portland, Oregon; London; Frankfurt, Germany; Hong Kong; and Sydney.
Jonathan S. Thomas is president and chief executive officer, and Victor Zhang serves as chief investment officer.
Delivering investment results to clients enables American Century Investments to distribute over 40% of its dividends to the Stowers Institute for Medical Research, a 500-person, nonprofit basic biomedical research organization. The Institute owns more than 40% of American Century Investments and has received dividend payments of more than $2 billion since 2000.
International investing involves special risks, such as political instability and currency fluctuations.
Equity Trustees Limited (Equity Trustees) ABN 46 004 031 298 | AFSL 240975 is the Responsible Entity for the American Century Global Small Cap Fund (the Fund). Equity Trustees is a subsidiary of EQT Holdings Limited ABN 22 607 797 615, a publicly listed company on the Australian Securities Exchange (ASX: EQT). The investment manager for the Fund is American Century Investment Management, Inc. (ACIM) which is exempt from holding an AFSL under the Corporations Act 2011 (Cth) (Australian Corporations Act) in respect of the financial services it provides to "wholesale clients" for the purposes of the Australian Corporations Act and does not hold such a license. ACIM is regulated by the Securities and Exchange Commission (SEC) (CRD#105778/SEC#:801-8174) under the United States laws which differ from Australian laws. ACIM relies on ASIC relief provided for under Class Order [CO 03/1100] for U.S. SEC-regulated financial services providers in relation to the provision of financial services to Australian clients. The distributor and client services provider for the Fund is American Century Investment Management (AU) Pty Limited (American Century). American Century is an affiliate of ACIM and holds an AFSL (No: 518417) to provide general financial product advice to wholesale clients and will distribute the Fund in Australia.
This information is intended to be general in nature and is not personal financial product advice. Any advice contained in this document is general advice only and has been prepared without considering the investment objectives, financial situation or particular needs of any particular person. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your investment objectives, financial situation and needs. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither American Century, ACIM, Equity Trustees nor any of their related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accept any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in the Fund.
The American Century Global Small Cap Fund's Target Market Determination is available by accessing https://www.eqt.com.au/insto. A Target Market Determination is a document which is required to be made available from 5 October 2021. It describes who this financial product is likely to be appropriate for (i.e. the target market), and any conditions around how the product can be distributed to investors. It also describes the events or circumstances where the Target Market Determination for this financial product may need to be reviewed.
Many of American Century's investment strategies incorporate the consideration of environmental, social, and/or governance (ESG) factors into their investment processes in addition to traditional financial analysis. However, when doing so, the portfolio managers may not consider ESG factors with respect to every investment decision and, even when such factors are considered, they may conclude that other attributes of an investment outweigh ESG considerations when making decisions for the portfolio. The consideration of ESG factors may limit the investment opportunities available to a portfolio, and the portfolio may perform differently than those that do not incorporate ESG considerations. ESG data used by the portfolio managers often lacks standardization, consistency, and transparency, and for certain companies such data may not be available, complete, or accurate.
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