Europe Small Cap Companies

Evidence Based Investing

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Strategy Description

The strategy invests in a concentrated portfolio of European Small Cap companies with a strong focus on value, profitability and quality of the balance sheet. In Europe there are many under researched small cap stocks that offer great value at the moment. Especially as we expect the European economy to strengthen in 2019 through stronger domestic demand. This would especially benefit smaller companies.

The research process is focused on finding companies that show relative value and quality characteristics within the sector.

The strategy has a focus on mid and small cap stocks and will have a relatively high volatility.

Fact Sheets

Investment Approach

Evidence Based Investing is our core investment philosophy, which means that rather than relying on short-term forecasting, we draw information about expected returns from the market itself. Letting markets do what they do best, drive information into prices, frees us up to spend time where we believe we have an advantage, namely in how we interpret the research and how we design and manage portfolios. It means we take a more systematic approach to investing, an approach we can implement consistently, and investors can understand and stick with, even in challenging market environments.

Rigorous, unbiased research has yielded six expected return premia for patient investors, which are equity premium, small cap premium, value premium, profitability premium, term premium and credit premium. We then select the most suitable securities to create the desired market exposure in the most cost and tax efficient way to capture these premiums.

We manage investment risks by using the combined powers of diversification and asset allocation. Diversification is a way to dampen risks. While some risks can be diversified away, market risk however remains and is expected to enhance your long-term returns if you build them into your total portfolio, and if you stay the course with them over time.

Asset allocation is determined by the investor’s specific goals and times frames and guided by his or her risk tolerance and capacity.

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