IA UK Smaller Companies
The resilient option Liontrust UK Smaller Companies McDermott likes the way that Julian Fosh and Anthony Cross of the
Liontrust UK Smaller Companies fund pick companies that tend to be resilient in market downturns . “ If you are going to buy smaller companies , you want to buy the quality end of it ,” he says . “ Because these companies tend to have good earnings and no debt , it means they are much more resilient in a sell-off .” However , Charles Younes , head of manager research at FE fundinfo , expresses concerns about the fund ’ s £ 1.2bn size , and the high overlap of holdings with the £ 5bn
Liontrust Special Situations fund .
The growth option TB Amati UK Smaller Companies Paul Jourdan ’ s TB Amati UK Smaller Companies fund has a “ growth tilt ” with exposure to areas such as technology and healthcare . “ Amati has a strong pedigree in UK smaller companies ,” says Hughes . “ Jourdan has built an experienced team over the years . The same team also manages a VCT portfolio , which provides a pipeline of ideas from pre-IPO through to the listed space .” Again , however , Younes expresses concerns about the fund ’ s size , saying it struggled to maintain outperformance once it hit the £ 1bn mark . Its assets now stand at £ 840m .
The core option TM Tellworth UK Smaller Companies While the £ 400m TM Tellworth UK Smaller Companies fund is less than four years old , Hughes refers to managers Paul Marriage and John Warren as small-cap veterans who know this area of the market inside out . “ They shun unprofitable companies , instead preferring established businesses with sensible management teams ,” he says . Hughes notes that about 60 % of the fund is in companies in the £ 250m to £ 1bn bracket . “ Capacity management is important , with the managers clear they will close the fund when they feel it has become large enough ,” he adds .
Issue 86 - July 2022 / 55 /