At a recent seminar, Citigold Half Year Investment Outlook, Krungsri Asset Management invited Mr. Frederick Schaeter, Client Portfolio Manager from Schroders International Selection Fund to provide information about the master fund - Schroders ISF US Small & Mid Cap Equity, while Mr. Kiattisak Preecha-anusorn, KSAM’s Assistant Vice President for Alternative Investment Department, elaborated open-ended Krungsri US Small-Mid Cap Equity Hedged FX Fund. The initial public offering of its units are made during June 21-28 June 2017.   

Mr. Schaeter said that the US economy tends to make satisfactory improvement with higher employment rate and robust corporate income and several analysts believes a possibility to see the key support factor for the US growth - US President Mr. Donald Trump's tax cut policy. As a result, small- and medium-sized firms which pay the corporate income tax at over 30% will gain directly from the government policy. Moreover, amidst the low US interest rate and recovering US economy, small- and medium-sized enterprises will receive direct benefits as more than 80% of their income are derived from domestic markets.
Mr. Schaeter conceded that the US stock market's valuation is relatively high, however, with this year's estimated GDP growth at 2-2.5% and improved domestic consumption, now is the right time for equity investment. There remain much more investing opportunities in small- and mid-cap stocks which are growing satisfactorily in this economic situation, while most analysts flock into large-cap stocks, a high number of good small- and mid-cap stocks remain undiscovered in the US market and several of them are below their valuations. Therefore, the fund is seeking these stocks which will give favourable returns to the unit holders. In addition, their prices are not too high and, interestingly, their profitability, growth rates and work efficiency are higher than those of large-cap stocks. However, most investors have not yet seen this investing opportunities.

Source: Starts In 1979, Based On Price Returns, CS US Equity Strategy, the BLOOMBERG PROFESSIONAL ™ service, S&P Capital IQ/ClariFi  
 

Having been established for over a decade, Schroders ISF US Small & Mid Cap Equity Fund is being managed by a fund manager with over 37 years of experience and a team of analysts for small- and mid-cap stocks. Its records stand out when compared with a small-cap stock index Russell 2500. The fund's annual return averaged 10.9% per year during 2005-2016, higher than Russell 2500's 8.4% and S&P500's 7.5%.