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Columbia Threadneedle Investments’ American Smaller Companies fund hits US$1 Billion

Columbia Threadneedle Investments, a leading global asset management group, announces that the value of its Threadneedle American Smaller Companies fund (the Fund) has passed the US$1 billion mark since the start of 2017, reaching 1,065 million at the end of January, reflecting both the growth in the individual holdings and the strong demand from investors...

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Columbia Threadneedle Investments, a leading global asset management group, announces that the value of its Threadneedle American Smaller Companies fund (the Fund) has passed the US$1 billion mark since the start of 2017, reaching 1,065 million at the end of January, reflecting both the growth in the individual holdings and the strong demand from investors for the asset class in the aftermath of Trump’s election as President of the United States. The Fund, co-managed by Nicolas Janvier and Diane Sobin, invests in companies that typically have a market value of between US$500 million and US$10 billion at the time of purchase.

Rated 4 stars by Morningstar, the Fund has delivered investors 12.8% annualised performance in the last five years (USD, retail net, as at 31 Jan 2017). The fund currently has an active share of 91.4.

Nicolas Janvier, co-manager of the Fund said: “Donald Trump’s win was a game changer for the US – economically, politically and for its stock market. We believe that Trump’s pledge to lower US corporate taxes will benefit smaller companies which typically pay higher effective tax rates than multinationals, as will his “America first” stance.

“From early summer through to late October, we added specific stocks incrementally within financials and other cyclical sectors and we continued to add to our positions in banks and industrials after the election. At the same time we lowered our exposure to Real Estate Investment Trusts, combining our stock-specific views with expectations for the macroeconomic backdrop.

“We have increased our positions in companies with higher exposures to the domestic economy as we expect these firms will fare best in the event of stronger growth and favourable tax policies. Over the last five years, US small cap returns have been driven more by increases in valuations than earnings, but we think that earnings will matter much more through 2017. We believe that a clear divide between winners and losers will persist throughout the year which is a rich environment for active portfolio managers.”

Gary Collins, Head of Wholesale Distribution for EMEA and Latin America, said: “The Threadneedle American Smaller Companies fund is well positioned to capture the high growth potential of North American small and mid-sized companies. Nicolas and Diane have achieved just that and we are pleased to celebrate this milestone with the team.

“Whilst the outcome of ‘Trumponomics’ remains uncertain, we believe that the volatility surrounding the current political changes provides opportunities for long-term active management to deliver outperformance for investors. This Fund capitalises on our US equities team’s extensive research capabilities and successful investment approach.”

Next Finance , March 8

Article also available in : English EN | français FR

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