Acadian launches EM Small-Cap Ucits

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Acadian Asset Management has launched its Emerging Markets Small-Cap Equity Ucits USD, a daily traded Ucits vehicle.

Domiciled in Dublin, the fund will use a bottom up stockpicking approach, as well as Acadian’s proprietary forecasting model for investing in emerging market equities.

Benchmarked to the MSCI Emerging Markets Small-Cap Index, the fund will target an active share of more than 80%, which means it expects to have significant holdings outside the benchmark. The fund is mandated to look beyond established emerging market themes, such as consumption trends.

Patrick McCafferty, senior vice president and portfolio manager at Acadian’s London affiliate, said that the fund would rely on the historical inefficiency in pricing of both emerging markets and small cap stocks.

“We believe that our broad experience in bottom up stock selection, combined with our systematic approach and focus on risk control, will enable us to find the mispricing opportunities that are most likely to deliver outperformance,” he said.

“Acadian’s universe of approximately 4,800 small cap emerging market stocks is significantly larger than the 800 stocks in the MSCI Emerging Markets Small Cap Index. The fund will therefore be able to access a very broad array of stocks, including many that we believe are under-followed and thus even more liable to mispricing. Acadian’s structured process has the tools to exploit a far broader universe than that of managers who take a more fundamental approach.”

“In addition to providing a broad opportunity set, emerging market small cap stocks provide diversification benefits, as they are typically more reliant on domestic markets. Unlike large cap stocks that derive most of their revenues from exports and are subject to the global economic cycle, emerging market small cap stocks offer greater exposure to each underlying country’s idiosyncratic investment stories.”



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