Merian UK Smaller Companies Focus Fund R GBP Inc

UK Smaller Companies

Rated Fund 2017-19. Set apart by team-based approach and investment process

Merian UK Smaller Companies Focus has lost its shine in recent months, but remains a standout performer in this asset group over three and five years.

Nick Williamson became lead manager at the start of 2016 and has attracted a following on account of his conviction behind certain stockpicks proving highly pro­fitable. That led Morningstar to upgrade its analyst rating last year to bronze.

A team-based approach and slightly unusual process set the fund apart. Most smaller companies funds are based on a bottom-up stock picking approach with little regard to the economic backdrop, but the Merian team blends top-down views with fundamental analysis.

The team has a pragmatic and flexible investment approach with no rigid bias toward a ‘value’ or ‘growth’ style. Instead, they look to respond to prevailing economic and market conditions and position the portfolio accordingly.

Williamson says that the team effort helps to generate lots of ideas that can be investigated in greater detail. He looks for two things in particular. The ­first is stocks that offer structural growth, which means they can grow no matter what the state of the economy. Then he looks for stocks that generate plenty of free cash. He like those because it gives companies the chance either to make acquisitions or to start paying dividends.

The fund is at the manager’s desired capacity, but does not look worryingly huge. At around £350 million, it can still take some meaningful stakes in the smaller companies upon which it focuses.

It has a performance fee of 10% of the relative outperformance of the Numis Smaller Companies index – a price worth paying if Williamson can maintain his stellar long-term record.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Merian UK Smaller Companies Focus Fund R GBP Inc
Manager
Merian Global Investors (UK) Limited
Type
Open Ended Investment Company
ISIN
IE00BLP58G83
Sector
UK Smaller Companies
Launched
30/05/2014
OCF
0.84 %
Risk Rating
5
3 Year Sharpe
1.11
3 Year Alpha
10.94
Yield
0 %
Benchmark
Numis Smaller Companies ex ITs
Merian UK Smaller Companies Focus Fund aims to provide capital growth from investing primarily in an equity portfolio of UK smaller companies. Smaller companies are defined for this purpose as those companies which are quoted on a regulated market and which have a market capitalisation no greater than the largest company in the Numis Smaller Companies Index at the time of initial investment. The Numis Smaller Companies Index is designed to monitor the performance of the smaller companies sector.
Holding %
Blue Prism Group PLC 5.91 %
Charter Court Financial Services Group PLC 4.13 %
Clinigen Group PLC 4.05 %
Marshalls PLC 3.85 %
Boohoo Group PLC 3.57 %
Alpha FX Group PLC 3.15 %
Onesavings Bank PLC 3.10 %
Unlisted Equity 1 2.63 %
Fevertree Drinks PLC 2.59 %
Burford Capital Ltd 2.58 %
Region %
United Kingdom 99.31 %
Sector %
Financial Services 24.99 %
Consumer Cyclical 23.94 %
Technology 14.47 %
Industrials 10.42 %
Basic materials 7.25 %
Real Estate 6.87 %
Name
Merian Global Investors (UK) Limited
Address
EC4V 4AD, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Nick Williamson
Joined 01/01/2016

Nick has worked at the company since 2008, covering a variety of sectors for the wider UK equities team. Prior to his appointment as manager of the Merian UK Smaller Companies Focus Fund, Nick acted as deputy manager on both the onshore and offshore UK smaller companies funds, since January 2014. Before this he was a sell-side analyst for more than 10 years, with a broad range of analytical responsibilities, most recently at Citigroup.

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.