1. The US has many dynamic businesses with great potential for growth: Small/mid-cap companies often operate in emerging or niche sectors with high growth potential. Their business models leverage adaptability and innovation, allowing them to capitalize on new trends and disrupt established industries.

2. Less analyst coverage creates undervalued opportunities: Small/mid-cap stocks typically receive less attention from analysts, resulting in lower market visibility. This undercoverage can create inefficiencies that can be exploited through deep fundamental research.

3. Valuations: Historically, small/mid cap stocks have traded at a premium to large caps, driven by higher growth potential, greater M&A activity, and lower liquidity. However, after the strong run up in large caps over the last few years, this premium has turned into a discount as measured by the relative forward P/E multiple and free cash flow yield of the S&P MidCap 400 Index vs S&P 500 large cap Index.

4. Emerging favorable macroeconomic environment: The US political environment, evolving tax and regulatory trends are creating a supportive backdrop for domestically focused small- and mid- cap companies.

Leveraging the Pender small cap equity investment process, the Pender US Small/Mid Cap Equity Fund invests in dynamic US companies that are underfollowed but offer growth potential.

• Places significant emphasis on assessing management, ensuring alignment of management incentives with shareholder interests.

• The Portfolio Manager follows a disciplined, repeatable security-selection process based on rigorous analysis and regular management interaction.

• Focuses on companies with the potential to compound earnings by reinvesting capital at above-average rates of return.

• Seeks exposure to companies with market caps between $500m and $25bn at the time of purchase.

• Targets high-quality businesses with a sustainable competitive advantage in growth industries.