Ausbil Dexia has launched a micro-cap fund that invests in Australian stocks.
The fund will invest in 35 to 65 Australian micro-cap stocks outside the top 200 listed companies on the Australian Securities Exchange.
"We think the market timing is right. There are now a lot of opportunities in the small end of the market. We expect a number of initial public offerings to take place," Ausbil Dexia portfolio manager Tony Waters said.
"We believe we can also take advantage of an information gap in the small-cap sector through research from brokers and our own internal research."
Waters previously worked with Ausbil Dexia's large-cap funds. The firm has also hired Chris Prunty to join the firm's micro-cap capability.
Prunty's experience includes research in the small companies industrial sector. Prunty previously worked at Investors Mutual, where Waters also worked.
The fund will use the S&P/ASX Emerging Companies Index as its benchmark.
"Most of our peers in the small-cap sector use the Small Ordinaries Index. We decided to use the new S&P index because it will allow us to fully invest in the index," Waters said.
He said the micro-cap fund will complement the firm's existing large-cap fund products.
"The investment process behind the small-cap fund is consistent with our large-cap funds. It fits well with our current offerings to retail investors," Waters said.
