International Small Cap Strategy

Canadian Investors

Overview

The international small cap strategy seeks long term capital appreciation by investing in a concentrated group of small and mid-capitalization companies domiciled in Developed Markets (as defined below) outside of North America. The Manager has the discretion, from time to time, to invest up to 5% in Canada where deemed warranted. “Small capitalization companies” means companies having no greater than a US$10 billion market capitalization at the time of purchase. The amount invested in any one country will vary depending upon the economic, investment, and market outlook and opportunities in each area.

The performance goal of the strategy is to surpass the benchmark index return from the MSCI EAFE Small Cap Index over a market cycle. The MSCI EAFE Small Cap Index captures small cap representation in Developed Markets around the world, excluding the US and Canada. “Developed Market” countries include: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. With 2,361 constituents, the index covers approximately 14% of the free float-adjusted market capitalization in each country.

INVESTMENT APPROACH

Our three-step investment process is based on a disciplined bottom-up approach, focusing on things we can control regardless of the market outlook.

From our perspective, the first step it to understand whether the company is currently making money and whether it can generate strong returns looking forward.

Next, we do comprehensive due diligence to assess management, company, and industry quality. A financial model is developed alongside our proprietary ESG matrix. We are seeking business models with sustainable competitive advantages, regardless of industry or economic conditions run by experienced management teams with a record of being good stewards of capital.

Finally, we measure the company against current holdings to determine our level of conviction to optimize portfolio risk/reward.

Our subjective evaluation of management is a critical step in our process and has many times proven to be our most effective predictor of future stock performance. We believe differentiating between good management teams and those that are exceptional is critical to the success of a long-term investment.

Contact us for further information

EMAIL
info@lauruscounsel.com

TOLL FREE
844-430-5501 (toll-free)

VISIT

120 Adelaide Street West, Suite 1901
P.O. Box 33
Toronto, ON M5H 1T1

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