European Small Caps PE Factor

Below you can find more information about the "Value Square Fund European Small Caps PE Factor" sub-fund.

Comments

Before deciding to invest in the sub-fund, one should read the prospectus and the key information document (PRIIPS KID). The documents are available in Dutch. You will find these documents further on this page. This is a publicity announcement.

Target

The objective of the sub-fund is to seek the highest possible return in absolute terms, rather than outperforming stock market indices, while limiting risks. The assets of this sub-fund are invested primarily in European equities of issuers with a relatively small market capitalization (small caps). Stock selection is based on fundamental analysis and a bottom-up approach whereby listed stocks are screened based on internally determined criteria commonly used in the Private Equity world.

At least 90% of the income received after deduction of expenses, fees and commissions shall be distributed annually to the holders of distribution units of the sub-fund so that they may benefit from the Definitively Taxed Income system in accordance with Art. 202 and Art. 203 of the Income Tax Code (ITC). In any case, the Annual General Meeting of Shareholders, when deciding on the dividend attributable to distribution share certificate holders, must always adhere to the required minimum distribution percentage as stipulated in Article 203 §2 of the Income Tax Code (ITC).

Sub-fund shareholders do not enjoy any protection or capital guarantee.

Strategy

The assets of this sub-fund are invested primarily in European equities of issuers with a relatively small market capitalization (small caps). European equities is defined as shares of issuers based in the European Economic Area (EEA), Switzerland or the United Kingdom.

Stock selection is based on fundamental analysis and a bottom-up approach where listed stocks are screened based on internally determined criteria often used in the Private Equity world (Private Equity Factor or PE Factor for short). Quantitative screenings are used to select those publicly traded companies that have traditionally been the hunting ground of "private equity" players. Considerations include underlying earnings growth, free cash flow generation, profitability on capital employed, debt ratio and valuation.

In circumstances where the manager estimates downside risks to be higher than potential returns, the portion invested in equities may be reduced in favor of investments in cash and money market instruments. When the manager estimates market risk to be medium, the sub-fund may have up to 25% invested in cash and/or money market instruments. When the manager assesses market risk to be high, the sub-fund may be invested up to 50% in cash and/or money market instruments. The sub-fund will always have at least 50% invested in equities.

Active portfolio management

The sub-fund's portfolio is actively managed by the portfolio manager, meaning that he makes discretionary investment choices at the portfolio level within the limits of the investment objective and policy.

The sub-fund's reference index is the MSCI Europe Small Cap Net Return (EUR). The manager of this index is MSCI Limited and is included in the register referred to in article 36 of Regulation 2016/1011. This index serves purely as a tool for the investor to compare the Fund's performance with that of the index and thus to make an informed assessment of the Fund's performance. The method of management is not aligned with this index but the calculation of the performance fee is.

If this index is substantively changed or no longer offered, the Board of Directors may decide not to offer any further reference index or to substitute an alternative reference index. In the latter case, the Board of Directors also decides which reference index.