The Pengana Emerging Companies Fund provides exposure to a diversified portfolio of Australian small industrial companies.
Pengana is an active stock picker with an underlying belief that smaller companies’ share prices are often incorrectly priced due to a lack of broker coverage. Pengana will limit the funds under management to 0.5% of the Small Ordinaries Index in order to capitalise on this inefficiency, which is often most evident in less liquid stocks.
The fee structure is heavily geared to performance which aligns the interests of investors with fund managers, by combining a lower management fee with a performance based fee. With this structure in place the principal motivation for the fund manager is to deliver strong performance above the benchmark.