International Small Cap Strategy

US Investors

Overview

The International Small Cap strategy seeks long-term capital appreciation by investing in a concentrated group of non-US domiciled equities (market cap less than $10 Billion at purchase). Performance goal to exceed the return of the MSCI EAFE Small Cap Equity NET Index (USD).

Investment approach

We employ a bottom up process to develop high conviction portfolios comprised of lasting, high quality companies which exhibit the following characteristics:

  • High returns on capital
  • Defensible business models
  • Industry-leading management teams
  • Strong, consistent free cash flow generation

Comprehensive research

Our subjective evaluation of management teams is a critical step in our process—and has many times proven to be our most effective predictor of future stock performance. Our extensive experience helps us to differentiate between good management teams and exceptional ones. We believe this is absolutely critical to delivering long-term results.

Based on a set of firm-wide values, we believe environmental, social, and governance (ESG) factors are key elements of our long term value to clients. As active investors, we must delve into each companies risk and opportunities, including those related to ESG. We believe that supporting responsible business conduct best protects our client’s capital.

Performance

Annualized Returns

as of December 31, 2021
Laurus intl Small Cap
QTD
0.2
Inception
7.5
MSCI EAFE Small Cap Index
QTD
0.1
Inception
5.4

Returns for periods less than one year are not annualized. Data shows past performance and is not indicative of future performance. Current performance may be lower or higher than the data quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Inception date – March 2021.

Attributes

 

Performance:
  • Typically outperforms in flat or falling markets and in volatile market environments;
  • Typically underperforms in rapidly rising or strong speculative markets
  • Less volatility measured by standard deviation than its benchmark
  • Strong downside capture ratio
  • Turnover typically between 14-25%
  • High Active Share / High Tracking Error

 

CHARACTERISTICS:
  • Typical Sector Weights:
    • Overweight: Industrials and Information Technology
    • Underweight: Financials
    • No Weight: Utilities, Energy and Real Estate
  • Typical Regional Allocations:
    • Overweight: U.K. and Europe
    • Underweight: Japan and Pacific Basin
    • No weight: Middle East and Africa
  • Concentrated portfolio with 25-50 stocks; typically, 30-35
  • Weighted Average Market Cap: greater than the index and peers
  • Buy Range: $1 – $10 billion
  • Let the winners run up to $25 billion so long as thesis holds
  • Capacity evaluated at $6 billion; Hard Close at $7 billion
  • Benchmark Agnostic

For more information on the strategy please see our quarterly factsheet.
* Source: eVestment alliance in the eVestment International Small Cap Core universe

Laurus Investment Counsel (“Laurus” or the “Firm”) is an independent investment management firm established in 2014 with a head office in Toronto, Ontario. Laurus is registered as a Portfolio Manager in most provinces in Canada and an Investment Adviser with the SEC. Our investment philosophy and proprietary, systematic process is based on fundamental equity analysis of world-class smaller companies. Today we manage a variety of specialized equity portfolios across a variety of capitalization bands for institutional and individual investors.

The Laurus International Small Cap Composite inception and creation was March 31, 2021 and represents an equity strategy managed in US Dollars that utilizes a fundamental approach by investing in a concentrated group of high-quality growth-oriented non-US domiciled small/mid capitalization equities (market cap less than USD$10 Billion at purchase).

The MSCI EAFE Small Cap Index is an equity index which captures small cap representation across Developed Markets countries around the world, excluding the US and Canada. One cannot invest directly in an index.

The standard management fee schedule currently in effect is as follows: 0.95% for the first $25 million; 0.85% on the next $25 million; 0.75% on the next $50 million; 0.70% on the balance. Actual management fees charged may vary depending on applicable fee schedules and portfolio size, among other things. Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request. Past performance is no guarantee of future results. Results will vary among accounts. The U.S. dollar is the currency used to express performance. Gross returns are gross of management fees, custodial fees and withholding taxes but net of all transaction costs. Composite net returns have been calculated by taking the highest management fee in effect for the respective period from the gross composite returns.

A list of composite descriptions and limited distribution pooled funds descriptions are available upon request. Since inception Laurus International Small Cap Composite contains less than six portfolios, therefore a measure of dispersion is not presented.

Laurus Investment Counsel claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Laurus Investment Counsel has been independently verified for the periods September 1, 2005 until December 31, 2020. The verification report(s) is/are available upon request.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

GIPS Disclosures

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EMAIL
info@lauruscounsel.com

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

VISIT
161 Bay Street, Suite 3950
Toronto, Ontario M5J 2S1

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