The opportunity
The world’s largest source of micro cap stocks is in the US. Over a full market cycle, a well-diversified portfolio of high quality US micro cap companies run by top calibre management teams should significantly outperform larger cap portfolios. The companies targeted by the THB US Micro Cap Fund typically range in size from $250m to $750m in market capitalisation, and tend to grow faster and have more rapid earnings growth. Due to the market’s inefficiency – 45% of the US micro cap universe have no public earnings estimates – there is also potential for outsized returns. More than 50% of all US merger and acquisition activity is typically in micro cap companies and balance sheets are the healthiest in 20 years.
About the manager
Thomson, Horstmann & Bryant (THB), an investment franchise of Round Rock Advisors, LLC, is a dedicated micro and small cap specialist investment franchise based in Connecticut, USA. Founded in 1982, THB has 40 years’ experience investing in micro and small cap companies.
About the strategy
THB’s US Micro Cap strategy is based on the belief that there are inefficiencies in the micro cap segment of the market due to lack of analyst coverage, difficulty in identifying value and the impact that management skill has on the direction of smaller companies. THB utilises a disciplined, fundamental bottom-up approach that blends both qualitative and quantitative methods to construct a well-diversified portfolio of companies that possess attractive operating metrics, yet with comparable valuation to the Russell Microcap Index.
1. In AUD as at 30 June 2026 on a net, pre-tax basis and assume the reinvestment of distributions. Past performance is not an indicator of future performance. Fund inception date was 5 September 2014 however inception performance is calculated from 1 October 2014. ↵ Return to the reference