With US small and mid-cap indices hitting fresh highs in 2017, investors have turned their attention to opportunities in the sector. While some are making their foray into the US small and mid-cap space, others are cautious that the sector is becoming over-heated.

The Citywire research team analysed funds in the US small and medium companies sector, and sieved out the top performers in 2016.

*Funds included in this analysis are registered for sale in Singapore and/or Hong Kong. Returns are as of 31/12/2016, and in US dollars.

5.

Fund

1 Yr TR (%)

Manulife Global Fd-US Small Cap Equity AA

                 24.1

Managers: Joseph Nowinski, Bill Talbot (Citywire + rated)

As of end 2016, the fund invested largely in the industrial (18.0%), financials (16.8%) and information technology sectors (16.0%).

Its top holdings included Patterson-UTI Energy (2.2%), which operates land-based drilling rigs in the United States and Canada, and Bio-Rad Laboratories (2.1%), which manufactures and supplies products for life science research and clinical diagnostics.

4.

Fund

1 Yr TR (%)

Legg Mason Royce US Smaller Companies A Dis A USD

24.2

Manager: Lauren Romeo

Launched in 2004, the Legg Mason Royce US Smaller Companies fund is sub-advised by Lauren Romeo from Royce and Associates.

Its assets stood at $220.0 million in Dec 2016, and its top three holdings were Genworth MI Canada (3.0%), Federated Investors (3.0%), and j2 Global Communications (2.9%).

3.

Fund

1 Yr TR (%)

AB SICAV I-US Small and Mid-Cap Portfolio A USD

24.5

Manager: James MacGregor (Citywire A rated)

The fund is managed by the AB’s Chief Investment Officer of Small and Mid-Cap Value Equities James MacGregor, and had net assets of $144.9 million in end December 2016.

It focused largely on the information technology (20.2%), financials (19.7%) and consumer discretionary (16.6%) sectors, and among its largest holdings were Booz Allen Hamilton (2.0%), a strategy and technology consulting firm and Synergy Resources (1.8%), an oil and natural gas exploration and production company.

2.

Fund

1 Yr TR (%)

RBC Funds (Lux) US Small Cap Equity B USD Cap

28.4

Managers: Steve Kylander, Lance James

The fund is managed by Steve Kylander and Lance James. As of end 2016, its top holdings included Compass Diversified Holdings (3.1%), United Community Banks (2.2%) and ACCO Brands (2.2%).

1.

Fund

1 Yr TR (%)

Legg Mason Royce US Small Cap Opp A Dis A USD

28.8

Managers: William A. Hench

The fund is sub-advised by small-caps expert William Hench from Royce and Associates, and focuses on small and micro-cap U.S. companies.

As of end 2016, its total assets stood at $903.0 million. The bulk of its portfolio was invested in information technology (25.5%), industrials (21.1%), and consumer discretionary (11.8%) stocks.