Nimmo's small cap trust beats index with 38% growth

Looking forward to the remainder of 2010 and into 2011, respected small-caps manager Nimmo believes that although the emerging BRIC markets will help push forward the world’s economy, the recovery is likely to be slow and anaemic in character.

‘In addition, the sovereign debt crisis and issues around the sustainability of the euro may return periodically to haunt the greater European economy,’ Nimmo added in his report to the stockmarket.

‘There looks to be a structural mismatch in the ability of a number of weaker European economies to solve their budgetary excesses within the euro, he continued, adding that the risk aversion which took over from the market’s rapid recovery between July and October last year – which triggered an upswing in risky recovery stocks and a slew of company fundraisings – had resulted in a shift among investors toward smaller and more reliable companies that was strengthened further following the BP and sovereign debt crisis.

‘It is unlikely that risk aversion will be the dominant theme [in 2010 and 2011] and the market may find it hard to make substantial progress,' Nimmo pointed out. 'Then good news is this is a particularly positive environment for our investment style.'

New holdings in Mulberry and pharma firm Hikma

In order to make the most of this complimentary trading environment, Nimmo has added new positions to the trust, which trades on a slight 1.4% discount, in British luxury brand Mulberry Group, best-known for its ‘Bayswater’ handbags seen gracing the arms of supermodel Kate Moss and of-the-moment television presenter Alexa Chung.

Nimmo also bought Hikma Pharmaceuticals, the Jordanian generic pharma company which is listed in London.

‘Hikma is the leading pharmaceutical company across the Middle East, where spending on healthcare is rising rapidly,’ he reasoned.