IMC Global Small Companies Fund update – March Quarter 2026

Listen to this latest update from Travis Prentice, Chief Investment Officer of the Informed Momentum Company and Portfolio Manager of the IMC Global Small Companies Fund, as he shares how the fund performed over the last quarter and where he is seeing real opportunity for global small caps.

Watch/Listen to the March Quarter 2026 IMC fund update ⏬:

 

Transcript:

IMC Global Small Companies Fund Performance for the Quarter

As far as market environment goes for the march quarter of 2026, it definitely was a quarter of extreme divergence pretty wild market environment, for the most part. We started the year pretty strong across global markets, and then obviously with conflict in the Middle East coloring the month of March.

It was definitely an extreme divergence, but, underneath the hood, we also saw some dispersion across securities and a growing split within technology where the market definitely favored AI industrial complex. But within there, a much more favorable environment for hardware companies versus software companies.

So even within sectors and industries, there was some extreme dispersion. Extreme divergence. So that was really the market environment as a whole for the March quarter. But some bullet points in terms of what worked and what didn’t work within the index itself or when the global smart cap market itself.

Small cap actually held in well for the quarter though, so the MSCI Acqui small cap index finished down only about 1.4% while the ACWI index fell nearly 6%. So, we did see in a continuation of the broadening out theme, and that definitely been a benefited small cap, versus, large and mid-cap.

From a sector perspective energy was the best performing sector, obviously helped by performance in March. But energy stocks in the quarter up almost 30% followed by utilities up about 4% in technology, up about 4% on the other side. Consumer discretionary was the laggard down about 10% from a country perspective within the index.

Korea and Taiwan led the market with gains of about 9% and 7% respectively. Israel and Canada also put in some pretty good performance while India continued to be a notable drag down almost 21% in the March quarter. From a factor perspective as far as the market environment’s concerned, momentum held in, even through March and ended the quarter as the best performing factor in global equity markets alongside value and value was also a top performer in the quarter.

And on the other side, growth was a notable laggard from a factor perspective. So those are the key bullet points, at least for the market environment in the March quarter as far as fund performance is concerned. The fund ended the march quarter up a little over 7% versus the index down about 1.4%.

So, some pretty good excess return, a little shy of 900 basis points for the quarter in terms of how we got to that performance from a risk perspective. So, from a risk attribution perspective momentum plus stock, specific risk or what we call. The informed momentum exposure really drove all of our relative returns helped a little bit by relative industry positioning.

Key drivers of performance

So, overweight to tech and industrials was further additive on top of momentum and stock specific risk from a pure performance attribution perspective. Stock selection really drove our returns, particularly in the US. Some standout performers in terms of stocks in the US were Sienna SanDisk, Momentum InLight – all top contributors.

And stock selection in Israel was also strong with Tower Semiconductor, Tel Aviv Stock Exchange Elbit Systems. And Taiwan also was a notable area of strong sock selection with Chroma Eight Elite Material. Asia Vital Components, Gold Circuit Electronics, were all very strong. And then from a country positionings perspective, our underweight, our continued underweight to India also aided returns.

From a positioning perspective, how the fund has changed from a, from a country relative perspective is we have increased exposure to Japan, although pretty slightly while we decreased exposure to the US and Europe. At the sector level, exposure to energy was the big change in the portfolio.

The biggest move to more weight and energy and also, industrials. We are also an area that we’ve added to in the fund. On the other side, we’ve seen a decrease in exposure on the consumer discretionary side and the healthcare side.

Reasons to invest in the IMC Global Small Companies Fund

In terms of why we think global small caps positioned to do well, and particularly our fund currently is two things: one is we continue to see a broadening out in terms of which companies are benefiting from the AI industrial complex build out, and that’s disproportionately helping smaller companies versus large. So, we’re definitely seeing a continuation of broadening out. The small cap companies really benefiting from, all the spending from a CapEx perspective across the world.

But also, we think it’s a good time to invest, particularly with this style of investing, is we’ve seen an extreme dispersion between security. So cross-sectional volatility has really increased, and this really helps a momentum strategy like ours in that there is a wide dispersion between what is working and what is not.

So, from a style perspective, Momentum’s very well positioned to obviously get a benefit in excess returns. From where, what we own in terms of the positive payoff to what we own, but also a disproportionately good payoff to where we’re not in terms of what is not working. So, if this market environment continues, we would expect our strategy to do quite well as the payoff to winners is good and as well as on the downside with the losers not being there will particularly help the strategy. So, all in all, we think the broadening out theme will help small cap versus large cap but also momentum pay off on moving to strength and away from weakness should do well for the foreseeable future.

 

To find out more about the IMS Global Small Companies Fund, click HERE. Follow us on LinkedIn.

*The text has been edited for clarity.

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Disclaimer:

This fund update has been prepared by SG Hiscock & Company (SGH) to provide general information only and is not intended to take the place of professional advice. It does not take into account the investment objectives, financial situation or particular needs of any particular person.

Equity Trustees is the responsible entity for the IMC Global Small Companies Fund, Neither SGH, Equity Trustees nor any of its related parties provide any warranty of accuracy. 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 this product. Follow the link the in the description for the full disclaimer. https://sghiscock.com.au/podcast-disclosures-and-disclaimers/.