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Fiera Capital brings top US fund to Europe

09 July 2024

The fund has beaten the Russell 2500 Growth Index for 23 years in a row.

By Patrick Sanders,

Reporter, Trustnet

Fiera Capital has launched its 'all-seasons' Small-to-Mid (SMID) Cap growth strategy to European investors, reflecting the increased demand for high-growth US equities in European markets.

As of March 31, 2024, the strategy had outperformed the Russell 2500 growth index for 23 years, returning 24.6% over 12 months, and 15.3% over three years.

Run by Sunil Reddy, the $6.1bn fund holds 60-90 companies with revenues between $150m and $10bn at the time of purchase. The portfolio identifies stocks positioned for further growth based on their innovative solutions to current market challenges, such as their use of cloud computing, e-commerce and AI.

Reddy said: “The market tends to underestimate the longer-term opportunity posed by small to mid-size companies”, noting they “represent an excellent opportunity for investors seeking exposure to dynamic US companies beyond the highly subscribed and analysed large-cap market”.

Klaus Schuster, EMEA CEO, added that US equities have recently become a “growth powerhouse” but the small to mid-cap segment remained “under-owned and under-researched”.

More than a third of companies on the Russel 2500 Growth index do not have earnings, Fiera claimed, making an active approach a useful one in the asset class.

“A passive approach just doesn’t work when it comes to the small and mid-cap market,” Reddy said, noting that investors need to “identify and avoid these zombie companies”.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.