Montanaro UK Income Fund STG Unhedged

UK Equity Income

Rated Fund 2016-19. Small company specialist with focus on quality

Montanaro UK Income was highly commended in Money Observer’s 2015 and 2016 fund awards. It was launched in 2006 by Charles Montanaro, whose business, Montanaro Asset Management, specialises in investing in smaller UK and European companies.

Although this fund invests primarily in UK small and medium-sized companies, up to 20% may be invested in European firms. ­The fund sits in the Investment Association’s UK all companies sector. It has a yield of 3.4%, with income paid quarterly.

Montanaro describes his investment approach as conservative. He and his investment team have their own money in the fund to show that their interests are aligned with those of investors.

He is keen to stress that investment ideas for the fund are generated internally – rather than through stockbrokers – and are researched in detail. Desktop research is supplemented with company and site visits “to kick the tyres”.

Montanaro says a team-based investment approach is adopted, and the team looks for well-managed, high-quality companies in growth markets. It does this because it believes such companies deliver the highest returns over the long term. However, this bias to quality does not compromise the fund’s emphasis on value. He argues that quality growth can come at a reasonable price. ­

The fund genuinely invests for the long term, which keeps its turnover and transaction costs low. Montanaro says that once they identify a suitable company, their ideal holding period is “forever”. ­This is one reason why the fund does not always greet corporate takeovers with as much enthusiasm as others might.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Montanaro UK Income Fund STG Unhedged
Montanaro Asset Management Limited
Open Ended Investment Company
UK All Companies
0.36 %
Risk Rating
3 Year Sharpe
3 Year Alpha
3.3 %
Not Benchmarked
The investment objective of the Fund is to deliver capital growth and income.
Holding %
4imprint Group PLC 4.11 %
Big Yellow Group PLC 4.00 %
Marshalls PLC 3.89 %
Cineworld Group PLC 3.67 %
Polypipe Group PLC 3.49 %
Victrex PLC 3.34 %
Fisher (James) & Sons PLC 3.03 %
RPS Group PLC 2.93 %
FDM Group (Holdings) PLC 2.89 %
St James's Place PLC 2.88 %
Region %
United Kingdom 88.28 %
Eurozone 5.72 %
Sector %
Consumer Cyclical 19.65 %
Industrials 17.88 %
Technology 13.88 %
Financial Services 12.76 %
Basic materials 10.86 %
Real Estate 10.63 %
Consumer Defensive 8.19 %
Montanaro Asset Management Limited
EC2R 8AR, London, United Kingdom
Legal Structure
Open Ended Investment Company


Charles Montanaro
Joined 12/18/2012

Charles Montanaro graduated with an honours degree in Anthropology from Durham University in 1976. He spent four years in industry before joining Merrill Lynch in 1980 as a private client broker in London. He joined Dean Witter Reynolds in 1984 and Drexel Burnham Lambert in 1987 as a Senior Vice President, where, in both cases, he was their top institutional broker in the UK, joining the high-yield bond department in 1989. In 1990, Charles joined MMG Patricof (now Apax Partners) as a Director of investment banking working with UK smaller companies. In August 1991, he founded Montanaro to specialise in analysing and investing in quoted European smaller companies on behalf of leading institutions. He has since launched and managed several funds totalling over €1 billion and established a strong track record. In addition, he has served on the Boards of two public smaller companies. He was appointed a Director of the Montanaro European Smaller Companies plc on 12 January 2012.

Data provided by Morningstar.

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