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Grandeur Peak: Best-in-Class Global Small Caps
08/25/2016 10:00 am EST
Grandeur Peak Advisors has proven itself to be one of the very best investment management firms for small-cap stocks generally, and for foreign small caps in particular, notes fund expert Mark Salzinger, editor The No-Load Fund Investor.
Grandeur Peak was founded in 2011 by three former high-level executives at Wasatch Advisors, including Robert Gardiner, well known as one of the country’s best small-cap managers with a global approach.
Both of these grew out of the firm’s larger funds, which were closed partially to maintain their characters as small or even micro-cap funds.
For the cores of the portfolios of the seven funds, the firm’s 7 portfolio managers attempt to find ‘best in class’ small and micro-cap growth companies that are going to get big.
The first part of this is the search for companies with sound management. Second, they look for companies with some kind of sustainable competitive advantage.
Third, they look for good business models. Fourth, the managers look for companies that have headroom to double in size within five years, which would take about a 15% annualized growth rate.
The International and Global Stalwarts funds emphasize Grandeur Peak’s favorite 75 to 125 stocks with market caps of at least $1.5 billion.
Performance of the Stalwart funds has been excellent. Through the first seven months of this year, for example, the duo gained more than 8% each, outpacing their siblings.
Global Stalwarts recently devoted about 35% of assets to the US, with the remainder split mainly among Asia ex-Japan (25%), Europe (21%) and Japan (8%).
International Stalwarts has a similar proportional breakdown, though with only a little in the US. Latin America is conspicuous for being virtually absent from both funds. In terms of sectors, financial, industrial, technology and consumer stocks account for most of the assets.
By Mark Salzinger, Editor of The No-Load Fund Investor
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