Ausbil’s small-cap fund grows assets as fees fall

Investment gains drive stronger annual result

Ausbil Global SmallCap Fund (ASX:GSC) produced a stronger financial result in 2026, with total comprehensive income rising to A$19.38 million from A$14.67 million a year earlier. The result was driven primarily by net gains on financial instruments, which increased to A$19.27 million from A$15.01 million.

The improvement came despite a less favourable cost profile in one area: the fund recorded no performance fee for the year, compared with A$753,154 in 2025, but total operating expenses still reached A$1.92 million. Management fees rose to A$1.32 million from A$1.24 million, reflecting the larger asset base before the fee reduction took effect.

Fee reduction lowers cost for investors

The most notable structural change in the report is the cut to the management fee from 1.20% to 0.90% per annum. The directors’ report says the reduction took effect on 31 January 2026, while a note to the accounts refers to 1 January 2026, leaving the precise effective date unclear in the filing.

Ausbil’s performance fee remains set at 20.50%, inclusive of the net effect of GST, on returns above the MSCI World Small Cap Net Total Return Index in Australian dollars plus 1.20% a year. No performance fee accrued in 2026, suggesting the audited accounts do not show the fund clearing that hurdle for the period, although the report does not provide a direct comparison of the fund’s investment return with the benchmark.

Assets expand as distributions shrink

Net assets attributable to unitholders climbed to A$133.75 million at 30 June, up from A$107.62 million. The fund held A$134.31 million in financial assets at fair value, comprising A$127.68 million in listed equities and A$6.63 million in listed unit trusts.

Distributions moved in the opposite direction. Total distributions fell to A$4.25 million, or 59.3757 cents per unit, from A$7.76 million, or 118.5550 cents per unit, in the prior year. That reduction does not by itself indicate weaker investment performance: distributions can vary with realised gains, income and the fund’s distribution policy. The year also saw A$26.62 million of applications and A$15.86 million of redemptions.

Global equity exposure leaves currency and market risks

The portfolio remains overwhelmingly exposed to listed global equities, with between 90% and 100% of net assets targeted to publicly listed global equity securities primarily selected from the MSCI World Small Cap Index. At year-end, US-dollar assets represented A$83.96 million, while euro, Japanese yen and other-currency exposures accounted for much of the balance.

The fund’s own sensitivity analysis shows the concentration of risk: a 10% move in equity prices, with other variables unchanged, would have altered net assets by approximately A$13.43 million. A 5% weakening in the Australian dollar against the US dollar would have increased net assets by about A$4.20 million on the reported assumptions, while a strengthening would have had the opposite effect. The fund does not hedge its exposure to non-monetary financial assets.

AQUA access adds a listed route

Units became available for trading on the ASX AQUA market under the code GSCF from 13 October 2025, alongside the existing off-market application and redemption process. The dual-access structure gives investors a listed dealing avenue, but the annual report does not disclose the market price, trading volume or any premium or discount to the fund’s underlying net asset value.

PricewaterhouseCoopers gave the fund an unqualified audit opinion. All A$134.31 million of investments were classified as Level 1 assets, meaning they were valued using quoted prices in active markets, and the report identified no contingent liabilities or material post-year-end events. The next useful evidence will be whether the lower fee is reflected in future expense ratios and how the fund’s return compares with its benchmark over a full reporting period.