The opportunity

International micro cap stocks are an underinvested and overlooked segment of the global share market and provide investors with an opportunity to generate outsized returns relative to larger capitalisation stocks. Like its US counterpart, international micro cap stocks exhibit favourable characteristics including a large universe of companies, little-to-no sell side coverage, few investment managers with a credible track record and process, and a valuable correlation benefit with respect to other segments of global equities markets. Moreover, those stocks are largely absent from global small and large cap oriented portfolios.

About the manager

THB Asset Management (THB) is a dedicated micro and small cap specialist investment management firm based in Norwalk, Connecticut. Founded in 1982, it has 37 years’ experience investing in US micro cap stocks and approximately US$703 million in funds under management. THB has one of the longest and most distinguished track records in US and international (ex- USA) micro cap markets. It also has an impressive retention rate amongst its investors.

THB is a signatory of the UNPRI and the Montréal Carbon Pledge, and a Registered Investment Advisor with the US Securities and Exchange Commission2.

About the strategy

THB International Micro Cap is a long-only, quantitative strategy with a qualitative overlay. The strategy seeks to exploit inefficiencies amongst international micro cap companies. These are companies domiciled in developed markets outside the US but including Australia. THB uses a series of proprietary quantitative screening tools, developed over 10 years within their fundamental US Micro Cap strategy, to filter the international universe (which includes all common stock listed within these countries’ primary exchanges) into an investable subset of securities. From this subset, THB creates a lower-risk and low turnover portfolio in the most inefficient and under-invested segment of the non-US equity market.

Unit price as at 31 October 2019 - Class W

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Issue price

0.9945

Redemption price

0.9846

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1. Returns in USD as at 30 September 2019 on a net, pre-tax basis and assume the reinvestment of distributions. Past performance is not an indicator of future performance. Strategy inception date was April 2015. Return to the reference

2. THB Asset Management is exempt from the requirement to hold an Australian Financial Services License under the Corporations Act 2001 (Cth) in respect of the financial services it provides to Wholesale Clients, and is not licensed to provide financial services to retail clients, in Australia. Thomson Horstmann & Bryant, Inc. is regulated by the Securities and Exchange Commission of the United States of America (US) under US laws, which differ from Australian laws. Return to the reference