Allianz Global Investors has launched the Allianz US Small Cap Equity fund, which is available to investors in the UK and Europe.
The fund is managed from San Diego by John McCraw and a team of four portfolio managers with more than 90 years’ collective experience covering the US small cap sector.
The actively managed, bottom-up strategy focuses on US companies that have a market capitalisation of between USD100 million and USD3 billion and that the team believes will offer high return potential, using an investment philosophy and process honed over decades. As small caps have strong ties to the local economy and culture, the team’s local knowledge and on-the-ground access to potential portfolio companies allows them to effectively research and monitor investment opportunities.
The new fund mirrors an existing strategy, the AllianzGI US Small Cap Growth fund, which has consistently outperformed its benchmark since its inception in 1993.
McCraw has also managed the US sleeve of AllianzGI’s Global Small Cap fund for the last year.
McCraw says: “Giving UK and European investors access to our time-tested US small cap strategy is a natural addition to our wider global small cap franchise, further extending our footprint in this popular and attractive asset class. The US small cap universe is enormous, stocked full of technology, health care, consumer and energy companies that have the potential to become tomorrow’s mid and large cap winners.
“Small caps have outperformed over time for a number of structural reasons. Smaller companies are often in the growth phase of their lifecycles, which means the scope for their profits and stock price to grow is greater. That tends to be particularly true when the economy is recovering, with the growth bias of small caps resulting in particularly strong performance. The fact that so many small caps are neglected by the research community – 6,000 US small companies are covered by fewer than five brokers – also increases our ability to find alpha by putting our own in-house research expertise to work to seek out the stocks with the highest return potential.”
The Allianz US Small Cap Equity fund will be available through the AGIF (Allianz Global Investors Funds) platform, a vehicle AllianzGI uses to distribute its funds to a number of markets across the globe (excluding the US).
The new fund will hold around 130 stocks and its benchmark will be the Russell 2000 Growth Index.