Bestinvest says
This fund was previously rated 5 stars by Bestinvest, but was downgraded in 2011 after it was soft closed to limit assets under management. Fund manager Harry Nimmo has a successful track record in smaller companies investing dating back to 1997. He benefits from the considerable resources of the Standard Life group, including the stock “Matrix” which is a key part of his process. The fund’s quality growth style bias often provides a degree of resilience in falling markets, but can lead to underperformance during recovery or value led rallies.
The manager looks for “tomorrow’s large companies today”, and believes such companies typically expand organically and operate within growth sectors. His investment universe is the Numis Smaller Companies index, which makes up the bottom 10% of the UK stockmarket by value - this includes smaller FTSE 250 stocks as well as traditional small caps. AiM listed companies are also included. The investment process is based around Standard Life's in-house quantitative stock Matrix, which scores companies on such factors as earnings and price momentum, director dealing, valuation and city ownership. This is matched against fundamental business analysis including regular company meetings. This is used to verify the scores of the Matrix and to ensure the business model is strong and repeatable – factors such as recurring revenue, barriers to entry, pricing power and market share are important.