UBAM - Adams US Small Cap Equity IC USD

Key points

• All-climate strategy providing a core exposure to US small caps
• Disciplined and systematic approach combining the best of systematic and fundamental research
• Strong portfolio construction maintaining sector and industry group neutrality in order to limit unintended risks
• Well-established process: the team has successfully run the strategy for nine years (2005-2013), outperforming in 25 out of 36 quarters
• The small-cap universe is less well covered and provides more market inefficiencies for seasoned investors whose in-depth research can make the difference

Investment case

US small caps offer diversification to any portfolio with a US equity allocation. The small-cap market index, the Russell 2000, is also less correlated to the main indices. Small caps have distinct risk/return characteristics that can enhance returns over time. Small caps are also more nimble and quicker to adjust their strategies in response to market changes than larger companies. Often in the hands of their funders or a narrow group of managers, smaller companies are managed to create value for their shareholders. Brokerage firms cover small companies less extensively, increasing the possibility of market inefficiencies.

Fund concept

UBAM - Adams US Small Cap Equity is a diversified portfolio of small-cap stocks based on the combination of a quantitative model and fundamental research. The process overlays control measures and limits sector and industry group, and individual stock weights. The team uses the quant model to narrow the focus and then apply fundamental analysis. The fund benefits from the leverage that comes from the model’s view over the entire market while adding value with the depth of fundamental research on the names that will be selected for the portfolio.