By ROBERT HARLEY 18/01/2007
This fund has now struggled to capture the smaller company market momentum for almost 2 years. The broad de-rating experienced by the smallest listed companies, which is where the fund has been focused, has been partly to blame, poor stock selection has also been a contributory factor. Against this backdrop the manager has also had to cope with large outflows from the fund which have compromised attempts to reposition the portfolio.
Whilst we have some sympathy for the relative valuation argument within the small cap universe, it remains to be seen when this might be realised, and with assets under management currently standing at just £16m, we would question the longer term viability of the fund. On balance we believe investors interests are better served seeking alternative recommended UK smaller company funds.