Rated Fund 2014-2017. Looking for successful small companies at a discount
This trust has been managed since 2008 by Don San Jose. His co-manager since 2014 is Dan Percella. The philosophy of these US-based managers is to invest in companies that have a sustainable competitive advantage, run by competent management teams with a track record of success; and to focus on owning stakes in businesses that trade at a discount to their intrinsic value.
Sector weights are a by-product of this approach. It can mean the trust is underweight in certain sectors where the manager feels it is hard for a company to maintain a competitive advantage.
The trust's benchmark is the small company Russell 2000 index, which represents the bottom 10 per cent by market capitalisation of all quoted companies in the US. But the managers will run their winners even if these companies grow larger than the index.
However, profits are taken when a holding gets to around 3 per cent of the portfolio or a sector weighting gets to 10 per cent above the benchmark.
The managers believe their focus on picking the right companies, with durable business models, consistent earnings and strong managers, at the right price, has resulted in the trust's portfolio being less volatile than the market.
They tend to invest towards the larger end of their investment universe. The portfolio has around 100 holdings. At the end of 2016 its main sector exposures were to financials, consumer discretionary and producer durable stocks.