The OC Micro-Cap Fund has released its update for the month of January and revealed that it has extended its 12-month total return to an impressive 41.5%.
This means the small-cap focused fund is outperforming the S&P/ASX Emerging Companies Accumulation Index by 14% over the period.
Which ASX shares are performing for OC Micro-Cap? Here's what you need to know:
Sezzle Inc (ASX: SZL)
One of the key contributors to its gains in January was buy now pay later provider Sezzle.
It recorded a gain of 30.6% during the month thanks to positive industry developments and its strong performance during the fourth quarter.
OC's analysts commented:
"The +98% day one rise in the Affirm share price made the other listed BNPL providers look cheap in comparison, despite the strong share price run many of these peers had already experienced in 2020. Beyond the relative valuation argument, however, SZL's core US business continues to grow strongly with the December quarter showing growth in underlying merchant sales of +205%."
Pleasingly, OC doesn't believe its growth is finished and suspects it could outpace rival Afterpay Ltd (ASX: APT) this year. And looking further ahead, the fund believes Sezzle has large opportunities internationally.
It explained:
"SZL have launched pilots for potential operations in India and Germany, both of which have the potential to become significant markets in their own right. We continue to own our stake in the business and look forward to catching up with management for their result roadshow in February."
Silk Laser Australia Ltd (ASX: SLA)
Another strong performer for the company was the Silk Laser share price. The laser hair removal, skin treatments and cosmetic injections provider's shares rose 11.8% in January.
OC commented:
"Silk Laser Australia was added to the portfolio in mid-December when the company listed on the ASX and was a strong contributor to Fund performance in January."
The fund manager remains positive on its future thanks to the industry tailwinds it is experiencing.
"It has strong industry tailwinds, particularly in the injectables space (anti-wrinkle injections, derma fillers, lip fillers) which is growing at 25% per annum, and underpinned by the increasing desire for consumers to retain a youthful appearance and increased aesthetic awareness overall."
And while it notes that private equity was selling part of its stake, it is pleased to see management with plenty of skin in the game.
"Whilst the IPO facilitated a partial private equity sell-down, key management retain a material stake and are highly energised to grow shareholder value."
Sezzle and Silk's strong performance managed to offset weak performances from other shares in the portfolio.
These include AMA Group Ltd (ASX: AMA) and Harmoney Corp Ltd (ASX: HMY). They fell a disappointing 19.4% and 17%, respectively, during the month.
