Lonsec awarded ‘Highly Recommended’ rating to NovaPort small cap and microcap funds

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NovaPort Capital, the Australian small caps manager, has announced its Microcap equity fund has received a ratings upgrade in recognition of the funds’ ability to deliver robust long-term returns.

During its latest review, Lonsec has upgraded the NovaPort Microcap Fund from ‘Recommended’ to ‘Highly Recommended’. For the fourth consecutive year, it has retained a ‘Highly Recommended’ rating for its Wholesale Smaller Companies Fund.

Both funds are managed by NovaPort’s co-portfolio management team of Alex Milton and Sinclair Currie, who began working together in September 2010 and have over 40 years’ combined industry experience. In the recent review, Lonsec said it considers the co-PM team to be among the most impressive in the small cap sectors.

The performance of the funds has been strong over the long term, with the Wholesale Smaller Companies Fund delivering 12.2% p.a. (after fees) over the five year period to February 2017 realising excess returns of 10.4% p.a. versus the benchmark and the MicroCap Fund generating 11.4% p.a. after fees over the same period (9.6% p.a. above index).

NovaPort targets companies with potential for 50% upside over three years in a concentrated portfolio, using a high-conviction, benchmark-unaware strategy.

Mr Milton said the rating highlighted both funds’ ability to offer investors the benefits of diversification while also improving long-term returns.

“We are pleased to have both funds recognised for generating quality returns. Investors are seeking capital growth at relatively low risk in a market characterised by low rates and investor portfolios dominated by blue-chip large caps. And we find smaller companies with real long term growth opportunities will continue to deliver some exciting performance for investors regardless of broad economic volatility.

“Our bottom-up, long-term approach is the key to identifying star performers that will meet and exceed expectations. Well managed, quality small caps are well positioned to exploit new and expanding markets and NovaPort favours stock with a number of common elements – sound balance sheets, strong management, favourable industry position and innovative, and differentiated products to meet market demand,” Mr Milton said.

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