Too large a smaller companies fund?

aroominyork

An article in ftadviser.com two years ago said “Concerns over the size of Liontrust’s £2.5bn UK Special Situations and £636m UK Smaller Companies funds have led FE Invest to remove the strategies from its approved list… FE senior analyst Thomas McMahon said: “We have become concerned that the [UK Smaller Companies fund] is now too large to be able to implement its strategy so are uncertain how it will perform in future”.

The smaller companies fund is now £812m. What are people’s views on this? Is that too large for a smaller companies fund to be adequately nimble? (I bought it when I first DIYd in 2017, paid the 3% spread, still pay the 1.4% OCF, and am ruing my inexperience. Stick with it or switch to the slightly higher octane Amati…?)

I’ve just looked at nine funds comparing their fund size to the market cap of their holdings: 50m-250m, 250m-1bn, 1bn-3bn, >3bn.

• Standard Life and Merian are £1.3b funds and have about 45% of holdings in market caps over £1bn.
• Jupiter is a £400m fund and is evenly split across the four market cap brackets.
• Miton, Baillie Gifford, Axa Framlington, Amati and Aberforth are under £250m funds and have approx. 5%, 20%, 0%, 15% and 10% respectively in market caps over £1bn.
• Liontrust, a £800m fund, has about 5% in companies over £1bn market cap with the rest under £1bn.

That does suggest Liontrust, for a largish fund, has a disproportionately large amount of holdings in companies that are too small to ensure liquidity issues could be managed.