For the 12 months ended Oct 31, 2020, the fund has returned 39.7%, including charges. This compares with net total returns of 9.86% for the MSCI Asia ex-Japan Small Cap Index. Over the three-year and five-year periods, the fund has also returned 12.8% and 8.8%, respectively. In comparison, the MSCI index has returned –1.1% and 2.4%, respectively. Since the fund’s inception, it has returned 5.5%, beating the index’s 3.8%.
When it comes to investing in equities, large-cap stocks tend to attract plenty of attention by virtue of their size. In contrast, the small- and medium-cap stocks often get overlooked — again, by virtue of their size. This, however, does not necessarily mean that small- and medium-cap stocks are inferior in delivering returns. On the contrary, they can achieve significant outperformance like their larger peers, perhaps even better.
Take the example of Nikko AM Shenton Emerging Enterprise Discovery Fund. The fund, which aims to achieve medium- to longterm capital appreciation by primarily investing in SMEs in Asia excluding Japan, has outperformed its benchmark.
