Old Mutual's AAA-rated UK Select Smaller Companies Fund aims to provide capital growth from a portfolio of primarily UK smaller companies. The fund is well diversified with a portfolio of more than 100 holdings.
Even though the fund is not the top fund in the IMA's UK Smaller Companies sector, it is a consistent performer over the long term – over five years it has managed to deliver top-quartile performance, beating its sector average by almost 18 per cent. While performance lagged significantly over three years, in the year to date the fund has managed to maintain first-quartile performance and beat its sector average.
The fund is managed by Daniel Nickols, head of Old Mutual Asset Management's highly regarded UK mid- and small-cap equities team. He joined the company in 2001 when it acquired Gerrard Investment Funds, where he was smaller companies portfolio manager.
The fund is focused on the themes of structural growth and quality cyclicals exposed to the strongest pockets of growth in the global economy. Tactically, a range of smaller cheaply valued units have been added to give the fund exposure to a segment of the market strongly geared towards improved risk appetite.
A caveat is the fund's high total expense ratio (TER) of 1.92 per cent. While this is broadly in line with most of its peers in the open-ended sector, investors are likely to get more value focusing on a UK smaller companies investment trust where the average TER sits at 1.02 per cent.
Source: FT funds data & *Morningstar
Performance figures as at 17 April 2012
Top 10 holdings (as at 29 February 2012)
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