This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions. This product is based overseas and is not subject to UK sustainable investment labelling and disclosure requirements.
We take a truly bottom-up approach, targeting companies with low valuations, sometimes implying temporary headwinds. We invest only when we see catalysts for growth, such as new management, or product innovation.
While many US small-cap funds tend to gravitate higher up the market cap ladder, ours is a true value strategy. It also offers access to micro-caps – an under-researched and less efficient market segment where experienced investors can add substantial value.
As seasoned active managers, we exploit inefficiencies in overlooked small-cap stocks. Moreover, our fund offers exposure to the US economy and typically excels during periods of market upswings or economic rebound.
In the FTGF Royce US Small Cap Opportunity Fund, we classify holdings into four key themes:
Unrecognized asset values (generally 15-25% of portfolio)
Turnarounds (20-35% of portfolio)
Undervalued growth (35-45% of portfolio)
Interrupted earnings (10-20% of portfolio)
Within the portfolio, we look to hold between 220 and 250 stocks, seeking to reduce stock-specific fundamental and liquidity risk.
We aim to both build the portfolio slowly and exit companies slowly when the time is right, ensuring limited impact on the share price.
This approach ensures that only our stock ideas with the best risk-reward characteristics stay within the portfolio.
Launched in 2002, three small-cap managers with an average of 30 years’ industry experience co-run the FTGF Royce US Small Cap Opportunity Fund.
Our goal is to find companies where we’ve identified a catalyst for growth and that are also very inexpensive based on their price to sales and price to book."
Portfolio Manager
14 years at Royce
30 years of experience
Portfolio Manager
14 years at Royce
28 years of experience
Assistant Portfolio Manager
2 years at Royce
13 years of experience
Dedicated small-cap specialists
Unique asset class knowledge
Substantial ownership
We offer UK investors a diverse range of active and passive strategies – from growth to value and equity income and from mega cap to small cap.
Footnote
1As at 31/12/2023.
What are the Key Fund Risks?
FTGF Royce US Small Cap Opportunity Fund
Class currency: The value of your investment may fall due to changes in the exchange rate between the currency of your share class and the base currency of the fund.
Concentrated fund: The fund invests in fewer companies than other funds which invest in shares usually do. This means that the fund does not spread its risk as widely as other funds and will therefore be affected more if an individual company has significant losses.
Investment in company shares: The fund invests in shares of companies, and the value of these shares can be negatively affected by changes in the company, its industry or the economy in which it operates.
Investment in smaller company shares: The fund buys shares in smaller companies. It may be difficult to sell these shares, in which case the fund may not be able to minimise a loss on such shares.
Fund operations: The fund is subject to the risk of loss resulting from inadequate or failed internal processes, people or systems or those of third parties such as those responsible for the custody of its assets, especially to the extent that it invests in developing countries.
Complete information on the risks of investing in the Fund are set out in the Fund’s prospectus.
Important Legal Information
Investments entail risks, the value of investments can go down as well as up and investors should be aware they might not get back the full value invested.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
This webpage is intended to be of general interest only and should not be construed as investment advice. It does not constitute legal or tax advice and it is not an offer for shares or an invitation to apply for shares of the Irish-domiciled Franklin Templeton Global Funds plc (the "Fund" or "FTGF"). For the avoidance of doubt, if you decide to invest, you will be buying units in the Fund and will not be investing directly in the underlying assets of the Fund.
Franklin Templeton ("FT") shall not be liable to any user of this document or to any other person or entity for the inaccuracy of information or any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission. Any opinions expressed are the author's at publication date and they are subject to change without prior notice. Any research and analysis contained in this marketing material has been procured by FT for its own purposes and is provided to you only incidentally. Data from third party sources may have been used in the preparation of this document and FT has not independently verified, validated or audited such data. References to industries, sectors or companies are for general information and are not necessarily indicative of the Fund's holding at any one time.
No shares of the Fund may be directly or indirectly offered or sold to residents of the United States of America. Shares of the Fund are not available for public distribution in all jurisdictions and prospective investors should consult their financial advisor before deciding to invest. The Fund may use financial derivatives or other instruments which may entail specific risks more fully described in the Fund's Documents.
Subscriptions to shares of the Fund can only be made based on the Fund's current Prospectus and, where available, the relevant Key Investor Information Document ("KIID"), accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. These documents can be found on our website at https://www.franklinresources.com/all-sites, obtained from FTGF's registered office at Riverside Two, Sir John Rogerson's Quay, Grand Canal Dock, Dublin 2, Ireland, from FTGF's administrator, or can be requested via FT's European Facilities Service which is available at https://www.eifs.lu/franklintempleton.
The Fund's documents are available in English, French, German, Italian and Spanish. A summary of investor rights is available here: summary-of-investor-rights.pdf (widen.net). The summary is available in English. The sub-funds of FTGF are notified for marketing in multiple EU Member States under the UCITS Directive. FTGF can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 93a of the UCITS Directive.
