Finserve Micro Cap Fund

Fund development

You can find complete information about Finserve's funds in the funds' fact sheets and information brochures. On the same page, you will also find other documents including full and half-year reports. The material on these pages is intended as general product information only. It should not be seen as investment advice or investment recommendations and should not be used as a basis for investment decisions. You should always read the fund's fact sheet and information brochure/prospectus before you start saving in a fund. We cannot guarantee that the information is complete and it is subject to change without notice. The published share value (NAV rate) is based on the latest available data.

Investment strategy

The portfolio

Will feature over 100 micro companies.

Small companies have a greater opportunity to create value over time than large companies.

Equal weighting

All equity positions are equally weighted and rebalanced regularly.

Historically robust and empirically proven strategies that demonstrate that an equal-weighted portfolio outperforms a value-weighted portfolio over time.

Momentum

In the periods between rebalancing, the fund has a Momentum strategy where the best performing stocks get the largest share.

Historically robust and empirically proven to buy more of the companies that have
a good trend creates better returns.

Lending

Shares are lent and the interest accrues to the fund's unit owners as part of the fund unit value.

The fund discretionarily lends out parts of the portfolio's shares and thus receives lending interest. It increases the fund's expected return and its competitiveness in comparison with other funds.

Why this fund?

It is difficult to get access to genuine small companies in fund format. Most index products have value-weighted portfolios that mirror large-cap indexes. The vast majority of managers do not buy small companies because the size of the managed capital affects the incentive to own the share, as the effect in the portfolio becomes small. Also liquidity and the fact that there are few shares in circulation (free float) make it more difficult for managers to buy smaller companies and in most cases impossible for index products to include them.

A known factor in financial theory is based on the fact that small and medium-sized companies over time give higher returns than large companies. As the number of company analysts is continuously decreasing, especially for small companies, and algorithms and robots are gaining more and more influence, it is difficult to assess and predict the development of these stocks. And even with analysis, it is almost impossible to predict which company will be the next big company and with a concentrated portfolio there is the risk that the active manager will miss the share winners.

Increasing index saving, and saving in funds with large capital under management, means that these investment products experience ever greater fluctuations (volatility) compared to small company products. In the event of unexpected events, the increased volatility is particularly noticeable when rapid and broad sales of shares (risk off) take place. The risk increases due to directional trading, fund outflows, systematic strategies and various types of mandatory rules are activated.

The factors above mean that the risk of investing in individual companies increases, but at the same time it means an increased return potential, especially in smaller companies.

Proud sponsor of Henke the Superman

We support the children's cancer fund Henrik Superman. We make an active choice and support a business that, through its work and commitment, makes life more bearable for many people.

Henke Superman