Herald focuses on smaller firms

FUND PROFILE: Herald Investment Trust's focus on small cap technology fund as delivered.

June 1, 2011

Launched in February 1994, at the time raising £65m, The Herald Investment Trust (HIT) seeks to achieve capital appreciation through investments in smaller quoted companies, in the areas of technology, communications and multi-media. It is the largest of the three UK-listed investment trusts focused on the technology sector.

520p

It measures performance against a hybrid benchmark comprising the Hoare Govett Smaller Companies Index including Aim in the UK (two thirds) and the Russell 2000 Technology Index (one third) in the US.

The fund has been managed by Katie Potts since its launch. Ms Potts was a technology analyst covering UK stocks at Warburg Securities, now part of UBS. She believes that smaller companies offer greater potential for capital appreciation than larger companies and this is reflected in the fund's portfolio, which is far more focused on small caps than other funds in this sector.

The portfolio is well diverified with over 230 stocks and is currently trading at a discount of around 17 per cent, in line with its average of 18 per cent. Over three and five years, the fund has outperformed its sector peers in terms of NAV performance.

Initially the fund's focus was in the UK and Europe and while the fund still has a strong bias to these regions, Ms Pott's aim is for global sector coverage. According to Herald, the high weighting in the UK is due to particularly appealing valuations here.

HERALD INVESTMENT TRUST (HRI)
PRICE	520	PRICE DISCOUNT TO NAV	-17.48
SIZE OF FUND	£416m	1 YEAR NAV PERFORMANCE	39.90%
No OF HOLDINGS:	234	3 YEAR NAV PERFORMANCE	67.30%
SET UP DATE	16-Feb-94	5 YEAR NAV PERFORMANCE	62.40%
MANAGER START DATE	16-Feb-94	TOTAL EXPENSE RATIO	1.09%
VOLATILITY	14.92	YIELD	0.057
TRACKING ERROR	n/a	GEARING	109.891
SHARPE RATIO	3.07	MORE DETAILS	heralduk.com
NAV	633