Invest In My Small Cap Fund

Why invest in small caps and the AlphaWealth Prime Small & Mid Cap (AWSM) Fund? Read this for important background.

Note: If you are looking for a tax-free savings account (TFSA), then read this.

I run the AWSM Fund, which is structured as a Unit Trust with a domestic small & mid cap mandate. The former creates a liquid entry point into an illiquid underlying for you, while the latter gives you direct exposure to my preferred portion of the equity market.

Find the AWSM Fund’s Q4:17 factsheet here.

Long-term investors in the AWSM Fund are not buying its current holdings (as these holdings and their weightings will change), but are investing in our underlying philosophy that guides our decision-making. Our investment philosophy can be broken down into four key tenants:

  1. Quality-bias: We try to find the best businesses possible, in terms of, profitability, growth and risk. Only after we are satisfied that the underlying business is good quality do we start to consider its valuation. Assuming equivalent quality, we prefer cheap businesses to expensive ones.
  2. Bottom-up stock selection: We are extremely focused bottom-up stock pickers, as small cap shares rarely dominate their markets and gems are often hidden far below the macro-economic data and noise that cloud the markets.
  3. Long-term investors: We are long-term investors in our selected companies. Growth takes time and, thus, we tend to hold our investments for a long time.
  4. High conviction, high concentration: Our Fund is made up of only our best ideas and highest convictions investments. We limit ourselves to a selection of only 15 to 20 individual stocks. This may make the AWSM Fund more volatile than its peers, but it also offers greater potential upside as our good ideas are not dilute by our more marginal ideas.

In summary, in AWSM Fund we aim to “buy material amounts of good businesses at good prices that have as little in common as possible“.

If you already know that you want to invest in the AWSM Fund, then here are the necessary steps to open an account and invest directly:

Download the following the application form here: AlphaWealth Investment Application Form

The following sections of the above application form must be completed and sent with your FICA pack to AlphaWealth’s client desk (or myself).

FICA Requirements for an individual (other entities have other requirements):

  • ID Copy,
  • Utility bill not older than 3 months,
  • Proof of tax details, IRP5 or latest tax return will suffice, and
  • Proof of banking account/statement should not be older than 3 months old.

All the completed documentation can be emailed to AlphaWealth’s client desk (or myself). for further processing.

Once it is confirmed that AlphaWealth has received all the necessary documents and all the completed forms, the account can be opened and you can transfer the cash for the investment (if a lump-sum and not a debit order).

I apologise for the complexity of the process, but regulation and risk is such that we need to do all of this.

Alternatively, our AWSM Fund is listed on a number of platforms and you could always request access to it and allocate to the Fund via that (slightly more expensive) route.

Kind regards

Keith McLachlan CA (SA)

Fund Manager