BMC Global Small Cap Select August 2026

The strongest contributors to the fund's performance were Sinch, Griffon, and NYAB, while the weakest were Limbach, United Natural Foods, and Brink's.

The share price increase in Sinch was driven by sentiment rather than news, as the market revalued companies that can benefit from increased use of AI, whereas Griffon and NYAB were bolstered by their solid reports. Garage door manufacturer Griffon continues to demonstrate solid pricing power in a weak market with organic growth of 7%, largely on account of price increases. Meanwhile, infrastructure company NYAB still benefits from the large investments in energy, electricity networks, and transportation in northern Sweden and Finland that resulted in turnover growth of 19% and a substantial margin expansion (from a 4.2% to 5.1% EBIT margin) during the second quarter.

Among the weaker contributors, Limbach was hurt by a poor quarterly report and subsequent reduction in full-year guidance. Demand was hit by protracted budget processes in the US semiconductor industry that led hospitals and other healthcare facilities to postpone new investments and maintenance work. At the same time, Limbach has been forced to absorb ever-higher wage pressure in the construction sector, owing to the data center boom, without being able to pass these cost increases on to customers, which are primarily outside the data center sector. 

Key market events and trends

The MSCI World (EUR) index rose by 1.7% in August and is now up 15.6% so far this year. As you might remember, we started the year anticipating 14% profit growth for 2026—which we since revised to 22%, with a further 14% growth expected for 2027. This solid profit performance has pushed the equity market upward, despite headwinds from higher energy costs and rising long-term interest rates. The US recently "celebrated" USD 40 trillion in national debt, which has contributed to rising credit demand, pushing bond yields up further.

Q2 2026 reports surpassed expectations by a fair margin. However, the results were bolstered somewhat by unrealized value increases in SpaceX and Anthropic, which companies like Alphabet and Amazon have accounted for as revenue. Adjusted for these non-recurring items, underlying profits grew by a solid 24% in both the US and Europe.

We also note that Nvidia's revenue growth of 100% and management's guidance for 70% sales growth next year—far exceeding analyst expectations—which offers additional support for the AI expansion theme.

We expect that the markets will continue to rise during the second half of the year, albeit with the usual volatility in September. As we move into Q4 2026, attention will focus even more on the mid-terms in the US and whether the Trump administration can maintain its control of the House and the Senate.

Portfolio changes

During the month, we bought into two new holdings, Alten and CAF, while we divested four others: Group 1 Automotive, IIFL Finance, Ingram Micro, and Limbach. Our investment hypotheses for Group 1 Automotive and Limbach, both of which possess resilient business models, have not performed as expected, and we anticipate no obvious improvements in the near term. IIFL Finance has been a marginal position since the Indian tax authority launched an additional investigation into the company at the start of the year. Ingram Micro has, on the other hand, been a successful Special Situations holding that reached our targeted return within just a few months. Below, we offer brief summaries of our two new holdings.

Alten: A global tech consultancy that supports its customers with product development, R&D, and digitalization. The company has seen more than 15% annual turnover growth over the past 25 years through a combination of organic and acquired growth. After some years of lower growth and a negative margin development, growth is now expected to accelerate as fast-growing areas such as defense, aviation, and energy represent a larger share for the company, while better capacity utilization is expected to push the operating margin towards historical levels of around 10%. 

CAF: The European manufacturer of trains and buses benefits from the large investments in public transport and the electrification of the vehicle fleet. Thanks to a record-large order book of around EUR 18bn, equivalent to four years' worth of annual turnover, the company is expected to deliver double-digit growth for the remainder of this decade, while the phasing-out of older, lower-margin orders and higher unit prices for new orders should propel the operating margin towards the record levels of 7–8% of the past. 

The fund's positioning

The fund now comprises 34 companies exposed to a range of sectors and geographies, with companies chosen on their own merits. We believe a concentrated but also diversified, actively managed small cap fund focused on stockpicking has all the prerequisites to deliver great returns to its unitholders over time.

*MSCI ACWI Small Cap NTR $ in EUR