Dynamic and Agile: OC Micro-Cap Fund

As part of an expansion of OC's product offering and in response to strong client demand, OC Funds Management together with Copia Investment Partners last year launched the OC Micro-Cap Fund which focuses on investing in Australian and NZ companies with a market cap of less than $350 million.

"The Fund gives investors exposure to a diverse range of compelling and often under-researched companies at the smaller end of the market," said Rob Frost, OC's Head of Investments. "It can be challenging to generate alpha among larger, more mature companies which are heavily researched and many of our clients had been asking for a dedicated micro-cap product."

More dynamic and agile than larger businesses, micro-cap companies present compelling investment opportunities. Able to test new ideas quickly and adapt faster to changing market conditions, micro caps typically have greater potential to generate rapid growth. Unlike their larger peers, they are often overlooked by the market, under-researched and under the radar of professional investors and analysts. For active smaller companies investors like OC, this can provide ample opportunity to exploit potential inefficiencies and generate meaningful long-term capital growth for investors.

"Many of the disruptive technologies and business models that are displacing established technologies and shaking up industries, start in the micro-cap space. Companies such as Cochlear, REA Group and Domino's Pizza Enterprises all began as micro-cap stocks," Frost said.

Underpinning the Fund is the same investment philosophy and process of OC's other highly rated portfolios, the OC Premium Small Companies and the OC Dynamic Equity Funds, with small adjustments to account for the different characteristics of micro-cap stocks.