UK Smaller Companies IT or Fund

Sally57

I’m looking to invest in a UK Smaller Companies IT or OEIC Fund as a satellite part to my portfolio. I am considering Rights & Issues IT, it is currently trading at a discount of around 9/10%. Also looking at the Blackrock and JP Morgan IT’s and the TB Amati OEIC fund. Does anybody hold or has an opinion on any of these or indeed other options to consider? Thanks.

StellaN

Rights & Issues is a highly concentrated IT so not really for me. I hold Standard Life UK Smaller Companies Trust (SLS). In my opinion it is lower risk, less volatile and has relatively low gearing which suits my requirements.

Linton

I had never heard of Rights& Issues.  It really is pretty small with a total capitalisation of £144M, highly focussed (70% invested in the top 10 holdings) and a liking for very very small companies - some of its largest holdings are in cmpanies too small for the FTSE250.  Specialist investors only in my view, ir's not a general UK small companies fund.

garmeg

What about Smithson (SSON)?

Sally57

StellaN and Linton - I hadn’t quite realised Rights & Issues were that concentrated and so specialist but having done further research I don’t think it’s suitable for me. StellaN I will look at SLS.
Garmeg - I already have global smaller companies covered with EWI so really looking for a UK smaller companies fund or IT rather than another global one such as Smithson.

Alice_Holt

https://www.janushenderson.com/en-gb/investor/product/the-henderson-smaller-companies-investment-trust-plc/
HSL  is currently on a c. 7% discount
https://quoteddata.com/2020/07/henderson-smaller-companies-significantly-outperforms-maintains-final-dividend/


You will find this article pertinent, it covers other UK smaller cos options including Rights and Issues:
https://www.itinvestor.co.uk/2020/08/henderson-smaller-companies-waiting-for-the-bounce-back/

garmeg

Sally57 said:

StellaN and Linton - I hadn’t quite realised Rights & Issues were that concentrated and so specialist but having done further research I don’t think it’s suitable for me. StellaN I will look at SLS.
Garmeg - I already have global smaller companies covered with EWI so really looking for a UK smaller companies fund or IT rather than another global one such as Smithson.

Sorry I thought SSON was UK.

bowlhead99

If you'll consider an OEIC rather than a fund, Marlborough UK Micro Cap Growth has a good record, up 75-80% in five years including more than recovering all the March losses, 300% in ten, 600% in fifteen.  It's a billion pounds in size now which sounds too big to be properly 'microcap' because a 1% allocation to something is a £10m investment, so liquidity might be a problem if they were trying to do everything on the micro scale.

For that sort of fund, they are still playing with some very small holdings with three quarters of their value not being in their monthly top ten disclosure, but will have a number that have gone well over their initial allocation as some holdings outgrow the smallcap and AIM indexes.  e.g. they hold Games Workshop which is about 120th in the FTSE 350 with a £3bn market cap; though that company would have only been a twentieth of that market cap four to five years ago. 

Of course, small cap growth will do well in bull markets and it is not really a 'generalist' fund. My Dad has it in his ISA and it's certainly outperformed WPCT / SUPP in the five years since he diverted some of his UK smallcap money from Marlborough into that newly-launching option

Another_Saver

Vanguard's FTSE 250 ETF?

Prism

I use LF Gresham House UK Microcap. It is quite focused with the top ten holdings between 4.5% and 3%.

Thrugelmir

MONTANARO UK SMALLER COS INVESTMENT TRUST PLC (MTU). 

Personally would go with an active manager with a focussed portfolio.