Columbia Threadneedle Investments has announced its Threadneedle American Smaller Companies fund has passed the $1bn cap at the start of 2017, reaching €1.06bn as of end-January.
The fund is co-managed by Nicolas Janvier and Diane Sobin. It invests in companies whose market value is comprised between $500m and $10bn at the time of purchase.
Nicolas Janvier, co-manager of the fund said: “Donald Trump’s win was a game changer for the US – economically, politically and for its stock market. We believe that Trump’s pledge to lower US corporate taxes will benefit smaller companies which typically pay higher effective tax rates than multinationals, as will his “America first” stance.
“From early summer through to late October, we added specific stocks incrementally within financials and other cyclical sectors and we continued to add to our positions in banks and industrials after the election. At the same time we lowered our exposure to real estate investment trusts, combining our stock-specific views with expectations for the macroeconomic backdrop.
“We have increased our positions in companies with higher exposures to the domestic economy as we expect these firms will fare best in the event of stronger growth and favourable tax policies.
“Over the last five years, US small cap returns have been driven more by increases in valuations than earnings, but we think that earnings will matter much more through 2017. We believe that a clear divide between winners and losers will persist throughout the year which is a rich environment for active portfolio managers.”