BMC Global Small Cap Select

BMC Global Small Cap Select is a global small cap fund with a goal to create high positive returns for our unitholders over time, in a sustainable, balanced, and risk-adjusted manner.

To create high returns in the fund, we use our own fundamental analysis to pick the companies we want to invest in. We select around 40 of the most exciting investment ideas that we find in the markets. This means we are not governed by an index, but instead have the possibility to invest in the most exciting companies with a market cap between USD 200m and USD 6bn.

In simple terms, we invest in companies with expanding profits and/or too low valuations. The most common occurrence in the stock market over time is that when a company's profits increase, so too does its share price, as the stock market is rational over the long term. The companies in our fund all have profits growing by an average of 10–30% per year.

In our global small cap fund, we invest in the world's finest entrepreneurs. In addition to dividing the companies into Champions and Special Situations, we have also split them into three sub-categories: niche players, rapid growers, and disruptors. A company categorized as a niche player is one with a unique competitive advantage. It operates in a field with little competition and has a unique technology. The field where it operates is too small to interest larger companies but sizable enough for a smaller company to grow. A disruptor is a company active in a mature field it can offer a new technology to challenge the status quo and take market share from existing players. A rapidly growing company has a unique business model that favors both organic and acquisition-driven growth.

To limit the risk, we don't invest more than 5% of the fund in any one company. Moreover, all our companies have robust balance sheets, which also reduces the volatility in the fund's unit values. We also only invest in companies listed on the world's larger and most regulated stock exchanges.

We consider our task to be managing our unitholders' capital to ensure its growth over the long term. We also believe the best way to do this is to always own quality companies. We thus often have only a minimal cash position in the fund, typically less than 1%.