Rated Fund 2013-2017. Meeting the management to find the best companies
This fund has been run since inception by Giles Hargreave, a highly experienced smaller companies specialist. His co-manager for the last four years is Guy Field. It invests in companies with a market capitalisation of £250 million or less at the time of purchase.
In fact, a considerable proportion of the portfolio is invested in companies of less than £150 million. Companies at this end of the size spectrum are at higher risk of failure than more established firms, but the managers offset this risk by holding a diversified portfolio of more than 200 holdings.
Hargreave and his team analyse each company carefully. They very rarely invest in a company without meeting the management face-to-face. Hargreave says choice is a great advantage of investing in small companies. The Aim, FTSE Small Cap, FTSE Fledgling and FTSE techMark indices include more than 1,000 companies operating in many different fields.
He and Field are backed by a large team undertaking primary research, trying to uncover the best opportunities before the rest of the market. As part of the process they meet more than 25 companies every week.
They like companies that are operating in niche markets, without too many competitors. But these companies also need good managers, strong balance sheets and good free cash flow.
They try to identify companies that will continue to produce good results, and will run their winners rather than taking profits early. Although they keep economic trends in mind, they focus primarily on the health of their companies.