Henderson Smaller Companies Investment Trust

UK Smaller Companies

Rated Fund 2014-20. Experienced manager applies solid 'four Ms' selection process    

This trust, a past winner in Money Observer's annual investment trust awards and highly commended in 2017, remains an excellent choice. The smaller companies team at Janus Henderson benefits from the leadership and experience of Neil Hermon, manager of the trust since 2002. Under his management, the trust has regularly outperformed its benchmark, the Numis Smaller Companies index, as it did in 2019.

Hermon's main focus is on growth stocks at the right price. He finds his investments mainly by conducting meetings with companies, where he assesses company managers and their strategy. He looks for "the four Ms": model (a strong business model); management (managers with a good track record); money (strong balance sheets and cash flow); and momentum (good earnings momentum). He runs a well-diversified portfolio of more than 100 stocks that he likes to hold for the long term - five years or more.

Although the trust benefits from merger and acquisition activity, Hermon says he does not buy stocks with that in mind, although he admits it is nice if it happens. He is more focused on buying companies he believes can grow.

Morningstar analyst David Holder regards the trust as a "strong candidate" for investors seeking exposure to a broad range of UK smaller companies from the Alternative Investment Market through to the FTSE 250 index. The trust's shares have traded on a discount to net asset value of 10% on average over the past three years, although that narrowed considerably last year to around par.

Narrative and ratings content all as of January 2020.  

See all Money Observer rated funds
Name
Henderson Smaller Companies Investment Trust
Manager
Janus Henderson Investors Ltd
Type
Closed Ended Investment Company
ISIN
GB0009065060
Sector
UK Smaller Companies
Launched
16/12/1887
OCF
0.42 %
Risk Rating
4
3 Year Sharpe
0.17
3 Year Alpha
13.50
Yield
3.3 %
Benchmark
Numis SC Ex Invt Com TR GBP
Fund Size
£ 531.88 million
NAV
668
Gearing
114
Discount Premium
-4
The investment objective is to maximise the total returns for shareholders by investing mainly in smaller companies that are quoted in the UK. The strategy is to use rigorous research to identify high-quality smaller companies with strong growth potential.
Holding %
Intermediate Capital Group PLC 3.70 %
Bellway PLC 3.57 %
Paragon Banking Group PLC 2.27 %
Clinigen Group PLC 2.23 %
Learning Technologies Group PLC 1.94 %
John Laing Group PLC 1.93 %
Oxford Instruments PLC 1.91 %
GB Group PLC 1.90 %
Victrex PLC 1.88 %
Cineworld Group PLC 1.84 %
Region %
United Kingdom 99.19 %
Sector %
Industrials 22.21 %
Financial Services 17.32 %
Consumer Cyclical 13.52 %
Technology 13.47 %
Communication Services 9.78 %
Real Estate 6.40 %
Healthcare 6.16 %
Basic materials 5.55 %
Name
Janus Henderson Investors Ltd
Address
EC2M 3AE, London, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Neil Hermon
Joined 11/01/2002

Neil Hermon is a Portfolio Manager at Janus Henderson Investors, a position he has held since 2013. He joined Henderson in 2002 as head of UK smaller companies. Prior to this, he served as head of UK smaller companies for General Accident Investment Management (later to become CGU plc). He began his career at Ernst & Young as a chartered accountant. Neil received an MA (Hons) in mathematics from Cambridge University. He is an associate member of the Society of Investment Professionals (ASIP).

Data provided by Morningstar.

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