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Small & beautiful: 10 wealth managers reveal their favourite little funds

While strategies running vast sums dominate the investment landscape, there are plenty of less well-publicised funds delivering the goods. We ask 10 discretionaries to name their favourite small funds.  

Denise Collins, investment manager, City Asset Management

Saracen Global Income & Growth fund is managed by Edinburgh based Graham Campbell and Daniel Leaf. The fund aims to achieve a long term total return though investing in a portfolio of global equity securities. The fund is currently £22m (31/05/2013) and the investment process is value driven with the team applying a forensic approach to assessing company fundamentals. As the name suggests the fund focuses on companies with the ability to grow capital but also with the scope for long term dividend growth.

‘The Miton US Opportunities fund is managed by Nick Ford and Hugh Grieves and is currently £18.9m in size having launched in March 2013. The fund seeks to achieve long term returns by investing in North American equities. Both managers have a successful track record in managing US small cap and mainstream funds and as a result the fund has a bias to small and mid cap companies. A strong process with a strong manager track record makes this fund an attractive proposition.’

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Denise Collins, investment manager, City Asset Management

Saracen Global Income & Growth fund is managed by Edinburgh based Graham Campbell and Daniel Leaf. The fund aims to achieve a long term total return though investing in a portfolio of global equity securities. The fund is currently £22m (31/05/2013) and the investment process is value driven with the team applying a forensic approach to assessing company fundamentals. As the name suggests the fund focuses on companies with the ability to grow capital but also with the scope for long term dividend growth.

‘The Miton US Opportunities fund is managed by Nick Ford and Hugh Grieves and is currently £18.9m in size having launched in March 2013. The fund seeks to achieve long term returns by investing in North American equities. Both managers have a successful track record in managing US small cap and mainstream funds and as a result the fund has a bias to small and mid cap companies. A strong process with a strong manager track record makes this fund an attractive proposition.’

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Andrew Crickmore, investment director, Canaccord Genuity Wealth Management

‘My tiny fund pick would be City Financial UK Select Opportunities managed by Leigh Himsworth. It is currently a few thousand shy of fifty million assets under management.’

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Haig Bathgate, chief investment officer, Turcan Connell

‘Our favourite small funds are APQ Partners and Kennox Asset Management both of whom we have invested significant sums into their flagship strategies.’

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James Gardner, fund manager, Signature

‘We consider this a higher risk investment so it’s certainly not for everyone but I believe Henderson Opportunities Trust, with a market capitalisation of only £52 million, offers investors access to a portfolio that should benefit significantly from a recovering global economy. Managed by James Henderson, primarily UK focused, it has a mid and small cap bias with significant exposure to the Industrials sector. It has performed strongly, particularly since the beginning of the year, up c.35% compared to c.12% for FTSE 100. Discount compression has assisted in its outperformance, coming in from 25% to stand closer to 15% now. Certainly not for the faint hearted!’

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Simon Brett, chief investment officer, Parmenion

‘The Chelverton UK Equity Income fund has approximately £90 AUM. Managed by the experienced David Horner and David Taylor, it is an income fund with a difference as it only invests in smaller/medium sized companies. As well as examining the usual cash flow and balance sheet metrics for dividend sustainability, the team get to know their companies well and understand how they plan to grow future dividends. Performance has been consistently ahead of the UK equity income sector and provides a useful diversifier for an income portfolio.’

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Andrew Hough-Smith, investment manager, WH Ireland

‘The Cavendish Opportunities fund has generated solid investment for its clients. It is run by Paul Mumford with an AUM of £84.4 million.’

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David Cowell, chief executive, Myddleton Croft

Miton UK Smaller Companies is pretty tiny at £6.3 million and has an excellent track record, and is run by Gervais Williams and Martin Turner.’

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Simon Dewar, investment director, Rathbones

Kennox Strategic although it’s now up to about £130m AUM so not really tiny any more!’

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Niamh Wylie, portfolio manager, Coutts

‘Small can be challenging for us as a large house, however we've recently allocated to Fidelity's Global Financial Services fund (size £300m) for our Coutts Multi Asset range of funds, scaling back our defensive overweights and introducing a cyclical bias to portfolios. This fund choice also reflects our bullish views on US banks and our preference for Financials as a means of capturing an upswing in the business cycle early.’

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James de Bunsen, fund manager, Henderson Global Investors

Majedie UK Income Fund

‘Majedie is a UK-equity focused fund house with an exceptional track record built over 10 years. Manager Chris Reid conceived and launched this strategy in 2011 and has been at Majedie for five years, co-managing the impressive long/short Tortoise fund. Before that he honed his analytical skills working on the sell-side.’

‘The UK income fund aims to beat the FTSE All-Share index and maintain an attractive yield, which it did in 2012 generating 4.7% of income. It is a high conviction strategy that melds strong macro views and extremely thorough bottom-up analysis. Reid looks for cheap companies going through change that are able to sustain their dividends. The attractive yields mean that he is paid to wait for the anticipated transformation to happen.’

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