Global small cap stocks have outperformed the tech-heavy Nasdaq 100 index and global large caps since July this year.
The MSCI World Small Cap index is up 13.3% since the beginning of July, compared to just 8.6% from the MSCI World index and 5.3% from the Nasdaq 100 index over the same period.
Roughly two thirds (63%) of the global small cap index is comprised of US small caps, followed by Japan with 12% and the UK, Canada and Australia at 5%, 4% and 3% respectively.
Since small caps are relatively US-focused, the asset class has benefitted more from market expectations of a Fed rate-cutting cycle and a stronger US economy.
After a few years of mega-cap tech stocks carrying the global stock market, it seems that small-caps are starting to pick up the pace ahead of their larger peers.
Below are five global small cap funds available for distribution in either Singapore or Hong Kong that have outperformed the Nasdaq 100 index since the start of the second half of 2024, according to data compiled from FE fundinfo*.
PGIM Jennison NextGeneration Opportunities
This small and mid-cap growth fund delivered 16% over the period, compared to 4.3% from the Nasdaq 100 index.
The strategy is managed by Mark Baribeau and John Donnelly. It has a fairly concentrated approach, with just 39 holdings.
Principal GIF Origin Global Smaller Companies
This small-cap fund has delivered 14.8% over the period, also well ahead of both the Nasdaq and large caps.
Managed by Chris Carter, Tarlock Randhawa and Nerys Weir, this growth-orientated fund has 184 positions with a notable overweight towards financials and industrials.
AXA Rosenberg Global Small Cap Equity QI
This fund delivered 14.2% over the period. It is managed by AXA IM’s QI Team, the firm’s quantitative investing division.
The strategy uses a multi-factor approach, with similar regional and sector exposure to the benchmark but with different tilts towards quality, growth, value and momentum factors.
Janus Henderson Horizon Global Smaller Companies
This fund delivered 13.9% over the period. It is managed by Nick Sheridan.
The strategy has a bias towards value stocks, but with an aim to provide capital growth over the long-run.
Invesco Developed Small and Mid-Cap Equity
This fund delivered an 11.36% return over the period. It is managed by Michael Oliveros.
The strategy invests in small- and mid-cap stocks, with a slight underweight towards Japanese small caps, and an overweight towards UK and European regions.
*The top-performing funds were measured in US dollar terms. The performance is based on data from FE fundinfo for the period between 1/7/24 and 27/11/24. The funds only includes fund vehicles that fall under the Singapore Mutual or Hong Kong Mutual equity international small cap sector as classified by FE fundinfo.
