Bestinvest says
The fund suffered during the credit crisis of 2007-9, which particularly hit smaller stocks such as AIM stocks which bore the brunt of the sell off due to their illiquid nature. This fund was formerly one of the top performing funds within the UK Smaller Companies sector when it was under the stewardship of Roger Whiteoak, who managed the fund for nearly seven years until early 2008. His replacement Chris St John has done a reasonable job of steadying the ship. Nonetheless, whilst he has a reasonable amount of experience and is supported by a strong UK team, we took the step of downgrading the fund to two stars (hold) as we have higher conviction in our existing recommended smaller companies funds.
The investable universe consists of around 1500 stocks from the FTSE Small Cap, FTSE Fledgling, Numis Smaller Companies and Alternative Investment Market indices with a market cap of up to £500m. The manager's strategy is to invest in core growth stocks which are supplemented by riskier stocks. The investment process is disciplined and primarily involves bottom up research (i.e. analysing companies in their own right). The manager favours companies with strong management and cash on the balance sheet. The team also looks to identify macro economic forces affecting the portfolio such as cyclical and industry trends, economic cycle, attitudes towards shareholders, interest rates and currency fluctuations.