Small Cap Opportunity Fund
Seeks long-term growth of capital.
True Small Cap Specialists
The seasoned management team has deep experience leveraging opportunities offered by small and micro-cap companies across market cycles.
The Fund employs in-house fundamental research in an effort to identify temporarily mispriced companies with potential catalysts for earnings-growth normalization.
Volatility Leads to Potential Opportunity
Small cap market inefficiencies can create attractive opportunities for disciplined active investors, and broad portfolio diversification helps mitigate potential downside in a volatile investment universe.
Diversification does not guarantee investment returns and does not eliminate the risk of loss.
The above are not investment guidelines or restrictions and are subject to change without notice.
Not all companies held in this Fund will meet the criteria listed.
The First Eagle Small Cap Opportunity Fund ("The Fund") is new and may not be successful under all future market conditions. The Fund may not attract sufficient assets to achieve investment, trading or other efficiencies.
The value and liquidity of portfolio holdings may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the United States or abroad. During periods of market volatility, the value of individual securities and other investments at times may decline significantly and rapidly. The securities of small and micro-size companies can be more volatile in price than those of larger companies and may be more difficult or expensive to trade.
There are risks associated with investing in foreign investments (including depositary receipts). Foreign investments, which can be denominated in foreign currencies, are susceptible to less politically, economically and socially stable environments, fluctuations in the value of foreign currency and exchange rates, and adverse changes to government regulations.
A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.
All investments involve the risk of loss of principal.
The First Eagle Funds are offered by FEF Distributors, LLC, a subsidiary of First Eagle Investment Management, LLC. First Eagle Investment Management, LLC provides advisory services.
The team focuses on small and micro-cap companies with characteristics such as inefficiently valued assets, turnarounds, accelerating growth and overlooked leaders, that can potentially benefit from catalysts such as new management, a more favorable business cycle, product innovation, and/or margin improvement. The team believes fundamental research can uncover opportunities to invest in companies that are attractively valued and have the potential to benefit from catalysts for future earnings recovery.
The team uses a bottom-up process, building the portfolio stock-by-stock.
Narrow the Universe
The team narrows the approximately 3,000 US Small Cap Stock Universe using their historical investment experience, but by attending management meetings, conference calls, investment conferences, and by following industry trade journals.
The team aims to identify companies that have low multiples and a potential catalyst for improvement.
- The team seeks to uncover companies that they believe are trading at a significantly discounted price/book or price/sales.
- Holdings typically fall into at least one category below:
- Inefficiently valued assets
- Accelerating growth
- Overlooked leaders
Catalyst for Improvement
- Utilizing the team's analysis and deep institutional knowledge of competitors, industry and existing holdings used for comparisons, they seek to determine the likelihood of execution success.
- Some potential catalysts the team look for that could lead to a company's return to normalized earnings are:
- New management
- More favorable business cycle
- Margin improvement
- Product innovation
- Diversified with approximately 180-300 holdings
- Typical holdings less than $3bn market cap (at purchase)
- Annual turnover expected 35%-45%
- Seasoned team of true small cap specialists
- Time-tested, catalyst-driven value approach
- Experience to find opportunity in short- and long-term dislocations due to volatility
Small Cap Opportunity - Fees and Expenses
*A contingent deferred sales charge of 1.00% may be imposed on certain redemptions of Class A shares made within 18 months following a purchase of $1,000,000 or more without an initial sales charge.
Class I Shares require $1mm minimum investment, and are offered without sales charge.
There are several ways to lower the sales charge on Class A shares: Aggregation, Rights of Accumulation and Letter of Intention. For details please refer to our prospectus.
In order to claim a breakpoint or other means of reducing the sales charge, an investor should notify his or her dealer, the Distributor, or the Transfer Agent (DST) at the time of purchase.
**"Other Expenses": are based on estimated expenses for the current fiscal year; actual expenses may vary.
***First Eagle Investment Management, LLC (‘‘FEIM’’) has contractually agreed to waive and/or reimburse certain fees and expenses of Classes A, I and R6 so that the total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividend and interest expenses relating to short sales, and extraordinary expenses, if any)(‘‘annual operating expenses’’) of each class are limited to 1.25%, 1.00% and 1.00% of average net assets, respectively. Each of these undertakings lasts until February 28, 2023 and may not be terminated during its term without the consent of the Board of Trustees. The Fund has agreed that each of Classes A, I and R6 will repay FEIM for fees and expenses waived or reimbursed for the class provided that repayment does not cause annual operating expenses (after the repayment is taken into account) to exceed either: (1) 1.25%, 1.00% and 1.00% of the class’ average net assets, respectively; or (2) if applicable, the then-current expense limitations. Any such repayment must be made within three years after the year in which FEIM incurred the expense.