Bell Asset Management has introduced a new offering to the market aimed at providing individuals with an avenue to invest in companies sitting outside the S&P/ASX 100.
The Bell Australian Small Companies Fund has been designed to outperform the S&P/ASX Small Ordinaries Accumulation Index over the medium and long-term investment horizons.
“We believe small caps offer an attractive option for investors, particularly in the current environment. Historically, small caps have delivered strong returns for investors able to take a long-term view,” Bell Asset Management portfolio manager Tim Johnston indicated.
“Small caps represent a broad and diverse universe with significantly less analyst coverage than large-cap companies. At this end of the market, active managers have a real opportunity to generate superior returns through research and analysis, particularly as many small companies are earlier in the growth life cycle and therefore have the potential to compound earnings over time.”
The underlying assets of the new managed fund will be a portfolio made up of between 30 and 70 stocks of small-cap companies listed on the Australian Securities Exchange. Portfolio managers of the offering will also have the ability to participate in initial public offerings and hold a maximum cash holding of 10 per cent.
The wealth firm confirmed the Bell Australian Small Companies Fund will reflect its disciplined stock selection approach, as well as its use of bottom-up research.
Further, a long-only view of the market and a valuation overlay to provide quality selections will be employed in the running of the new product.
The launch comes three months after the firm added three portfolio managers, Tim Johnston, James Nguyen and Scott Hudson, to its investment team to establish and manage a new Australian small companies strategy. All three appointments switched across from Tyndall Asset Management.
The Bell Australian Small Companies Fund joins the manager’s existing three products in the market covering global equities, emerging markets and high-conviction strategies.