Cazenove UK Smaller Companies Fund is one of the top three performing UK Smaller Companies funds over three and five years and is also far ahead of its benchmark index, FTSE Small Cap ex Investment Trusts, over these periods.
The fund's managers, Paul Marriage and John Warren, select shares according to their individual merits rather than sector or economic considerations, looking for growth potential and value. They seek high- quality smaller companies that are capable of producing shareholder value through above-average growth in earnings and dividends over the medium to long term.
They believe a differentiated product is important, but the company must also be a market leader in its chosen niche. This could help it expand profit margins and generate cash to expand the business. If supported by a strong management team that puts shareholders' interests first, they believe the recipe is in place for a successful long-term investment.
Shares recently added to the portfolio include London pub operator Young's, which Mr Marriage says they have known for a long time and have been tracking closely. "Over the past five years the company has exited brewing by astutely selling its central London site for housing and using some of the proceeds to fund the acquisition of highly rated London pub specialist Geronimo Inns," adds Mr Marriage.
Read our interview with Mr Marriage
Analysts at broker Hargreaves Lansdown like the fund. "We like the approach Paul Marriage has adopted on this fund and believe it could yield strong returns for adventurous long-term investors. This fund features on the Wealth 150 list of our favourite funds in each sector, and we believe its prospects are bright."
CAZENOVE UK SMALLER COMPANIES B Acc (GB0031092942) | |||
|---|---|---|---|
| PRICE | 179.98p | MEAN RETURN | 25.44% |
| IMA SECTOR | UK Smaller Companies | SHARPE RATIO | 1.53 |
| FUND TYPE | Open-ended investment company | 1-YEAR PERFORMANCE | -0.85% |
| FUND SIZE | £157.49m | 3-YEAR PERFORMANCE | 100.53% |
| No OF HOLDINGS | 61* | 5-YEAR PERFORMANCE | 34.44% |
| SET-UP DATE | 2 Aug 96 | TOTAL EXPENSE RATIO | 1.60% |
| MANAGER START DATE | 3 Jan 06 | YIELD | 0.86% |
| MINIMUM INVESTMENT | £1,000 | MORE DETAILS | www.cazenovecapital.com |
| STANDARD DEVIATION | 16.26% | ||
Source: Morningstar, *Cazenove Capital Management. Performance data as at 27 July 2012
Top 10 holdings as at 30 June 2012
| Perform Group | 3.54 |
| Low & Bonar | 3.06 |
| Vitec | 2.96 |
| British Polythene Industries | 2.82 |
| John Menzies | 2.82 |
| Smart Metering Systems | 2.66 |
| Scapa | 2.62 |
| Renold | 2.6 |
| Hansteen | 2.55 |
| Elementis | 2.5 |
Sector breakdown as at 30 June 2012
| Basic materials | 5.12 |
| Consumer goods | 10.59 |
| Consumer services | 11.55 |
| Financials | 8.88 |
| Healthcare | 3.82 |
| Industrials | 43.54 |
| Oil & gas | 2.2 |
| Technology | 11 |
| Telecommunications | 1.16 |
| Cash & other | 2.14 |
