SG Hiscock & Company launches global small companies fund with EAM Global Investors
SG Hiscock & Company Limited (SGH) in partnership with US-based asset manager, EAM Global Investors LLC (EAM) has launched the EAM Global Small Companies Fund into the Australian market. The fund will be distributed by SGH and provides Australian investors access to global small companies.
The launch of the fund follows the recent partnership announcement between the SGH and EAM Global Investors.
EAM’s chief executive, Travis Prentice, said the systematic investment approach used by the firm since 2007 has gained traction in the US and he expects the Australian market will follow suit.
“We use our own proprietary approach called Informed Momentum®, whereby our investment team invests in companies with positive momentum, but we also add rationale and risk management overlays to deliver alpha for clients.”
The listed universe of global small companies represents around 11,000 stocks, equating to 88 per cent of all publicly listed companies. By number of constituents, the global small cap universe is seven times larger than its mid and large cap peers combined. Spanning both developed and emerging markets, this opportunity set provides strong opportunities for portfolio diversification.
Mr Prentice said the sheer size and dynamics of the small companies’ universe can make it difficult for an investor to research each and every stock. Systematic elements within the investment process – such as momentum signals – mean opportunities can be identified and capitalised on in a timely manner.
“Historical data over the last 30 years shows the cumulative performance of the momentum factor outperforms that of value, quality and growth factors over time.
“Additionally, over the same period, momentum wins on a risk-adjusted basis, suggesting that an investor with the added tailwind of momentum exposure may prove beneficial over time.
“We’re looking forward to being able to offer Australian investors access to such a unique investment style through SGH,” Prentice said.
The EAM Global Small Companies Fund in Australia holds between 100-150 companies and does not use pre-set sector or country weightings, allowing the portfolio manager to follow the momentum factor within the risk management parameters of the fund.
EAM Global Investors – which has AU$3.4 billion in funds under management – has been in the Australian institutional market for several years and partnering with SGH provides a greater level of exposure to the adviser market.
Head of distribution at SGH, Anthony Cochran, said the addition of a global small companies’ manager with such a distinct investment philosophy is already generating strong interest from local advisers.
“EAM is entering the market at a time when advisers are looking for innovative investment products that have a proven track record of delivering returns.
“Our initial discussions with advisory groups have been overwhelmingly positive, and we anticipate strong demand for the strategy in Australia.
“Providing exposure to the momentum factor means investors don’t have to pick between value or growth. EAM have a proven track record of delivering strong risk adjusted outcomes for clients.” Cochran said.
The EAM Global Small Companies Fund has also been awarded a recommended rating by leading research house, Zenith Investment Partners.
The research report said: “Zenith believes EAM employs a differentiated investment approach and considers the investment team to be highly experienced. Overall, we believe EAM is well-positioned to deliver upon the Fund’s investment objectives.”
EAM Investors has joined several other global funds managers in the SGH Partnership Program, including Morgan Stanley Investment Management (Australia) Pty Ltd, LaSalle Investment Management Securities LLC. SGH and abrdn.
This follows the commencement of the strategic partnership in April 2023 between SGH and abrdn with SGH becoming a wholesale distribution partner for abrdn’s international funds in the Australian market.
For more information on the strategy, please visit EAM Global Small Companies Fund page.
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About SG Hiscock & Company
SG Hiscock & Company is a fund manager specialising in high conviction actively managed investment strategies and Managed Discretionary Portfolios. SG Hiscock was established in Melbourne in 2001 by six of its principals and is entirely owned by directors, staff and associates. The head office is based in Melbourne and has an office in Sydney. In 2016, the retail distribution and marketing for its funds was transitioned in-house and the firm now has a dedicated distribution team. In early 2019, SGH merged with highly regarded specialist discretionary portfolio manager, DMP Asset Management. SG Hiscock & Company commenced the SGH Partnership Program in June 2020. Combined with the SGH existing suite of Australian equity and Australian REITs (Real Estate Investment Trusts), the addition of the Partnership Program broadens their capabilities across Global REITs and Global Equities for Australian investors.
More information: www.sghiscock.com.au
About EAM Global Investors LLC
EAM Global Investors LLC (“EAM Global”) is an investment management firm solely-focused on delivering alpha for clients in global equity markets through its Informed Momentum® investment approach. EAM Global is a subsidiary of EAM Investors, LLC (together known as “EAM”). EAM’s momentum-driven approach to investing leverages their collective insight within a systematic process designed to deliver consistent and predictable outcomes. This Informed Momentum® investment approach combines momentum with stock selection, tailored risk management, and efficient implementation to deliver alpha for clients. EAM’s investment process aims to generate alpha by harnessing the power of the momentum premium, exploiting behavioural biases around new information, assessing the rationale behind improving/accelerating company financial performance, and by constantly addressing portfolio risk. The firm’s time-tested philosophy and investment approach has been applied consistently across all strategies since inception in 2007. As of December 31, 2022, EAM had approximately $US2.4 billion in assets under management. EAM is headquartered in Solana Beach, CA, USA.
More information: www.eaminvestors.com
The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (ETL1755AU assigned September 2023) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines.
