Swedish manager Simplicity has launched a Swedish smaller companies fund, following in the footsteps of the Simplicity Nordic and Simplicity Sverige, which invests in Stockholm-listed equities.
The new strategy focuses on Swedish smaller companies equities. It defines smaller companies as those that at the time of the investment do not have a market capitalisation value that exceeds 1% of the stock exchange’s overall value.
Although a higher risk category of investment, Simplicity argues that smaller companies in sectors such as environment, energy and IT are developing much faster than larger companies.
“Swedish smaller companies often have a higher share of their sales in the Nordic region and the rest of northern Europe. The sector has clearly had a stronger development than the rest of Eruope and has not been hit as hard by recent years’ financial turbulence,” Simplicity stated.
“As a group, smaller companies have a higher expected return than larger copmanies. At the same time, smaller companies are often harder to analyse and come with higher risk, because a larger share of their value depends on growth and that expectations are met.”
Initially offered via both accumulation and income share classes, the minimum investment is set at SEK100, and the fund is available on the PPM platform.
Simplicity has some SEK10bn (€999m) AUM in three fixed income funds and eight equity funds.