fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

ES River and Mercantile UK Equity Smaller Companies B

Targets capital growth from small cap and smaller mid-cap UK equities.

  • 720.25p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 3171.23p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 5.25% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.88%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 0.90%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 20 January 2022, fund commentary last updated 20 January 2022

The objective of the strategy is to outperform the Numis Smaller Companies (ex Inv Trusts) Index by 3% per annum (net of fees) by investing in a portfolio of investments which shall primarily consist of UK equities that reside in the bottom 10% of the UK stock market in terms of market capitalisation. In seeking to achieve the objective, the manager operates within broad risk constraints in order to limit the volatility of performance relative to the Index.

Fund summary

Sector UK Smaller Companies
Structure OEIC
Launched November, 2006
Size £591m
Yield 0.90%
Charging basis Income
Dividends paid 31 May, 30 Nov

Charges

Standard initial charge 5.25%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.88%

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Investment process

Manager Daniel Hanbury uses a very distinct investment process snappily titled PVT, which combines company fundamentals, valuation, and momentum, to unearth promising targets. He looks to invest in companies that have Potential (the P in PVT) namely an ability to create shareholder value through a growth in profits or cash flow at attractive Valuations (the V). The T is Timing which assesses when the right time is to buy and sell a stock. It aims to minimise the risk of being too early into an investment and to optimise the period of time held and returns generated once it has been bought. The fund's unique computer programme "Moneypenny" screens for new stock ideas with high scores, and also monitors the portfolio on the sell-side. Within Moneypenny there are four forms of Potential that are screened for: Growth, Quality, Recovery and Asset-backed. Fundamental research, company meetings and discussions with R&M's wider UK team form the remainder of the investment process. The approach is very much a team-based one, albeit final decisions on whether or not to invest remain in Hanbury’s hands. The majority of its holdings have a market capitalisation of between £100million and £2billion.

This is a well-managed, style-agnostic fund which has historically outperformed its benchmark across all stages of the market cycle. It is led by highly experienced manager Daniel Hanbury, who has around 25 years in the industry and is ably backed up by a twelve-person strong equity team. Hanbury has a very open, flexible, and innovative investment approach including using R&M’s unique “Moneypenny” stock screens. In contrast to the growth strategies which dominate the UK Smaller Companies sector, he invests in a combination of growth, value and momentum stocks. The relative size of the fund’s assets under management is also a positive, reducing liquidity risk. This is a core option for investors seeking exposure to the Small-Cap sector.

Manager research

Average monthly relative returns

  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.15%
  • 20/21 1.42%
  • 21/22 0.03%

Bestinvest MRI

  • 3 years 0.53%
  • 5 years 0.00%
  • Career 0.55%
  • 3 years 89.30%
  • 5 years 0.00%
  • Career 99.90%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Daniel Hanbury

Hanbury is Head of Income and Smaller Companies PVT Equities at River & Mercantile. Graduating from Loughborough University in 1996 with a First-Class Honours Degree in Mechanical Engineering, Hanbury began his career at Schroders on the UK Fund Management desk before joining the research department as an analyst in the UK Research Team. He joined Investec Asset Management in 2000 where he was responsible for the UK Smaller Companies Fund and the UK Unconstrained portfolios. Hanbury was a founding member of R&M Asset Management in 2006 when he launched the UK Equity Smaller Companies and UK Dynamic Equity strategies. He currently manages the UK Equity Smaller Companies, UK Equity Income and Core strategies.

Track record

Daniel Hanbury has 10.9 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.55%. During the worst period of relative performance (from September 2000 - February 2001) there was a decline of 14% relative to the index. The worst absolute loss has been 31%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -31.00% (September 2000 - March 2003)
Relative -14.00% (September 2000 - February 2001)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 December 2021

2.5793% Alpha Finl Mkts Consulting Plc
2.4663% Osb Group Plc
2.4226% Diversified Energy Co Plc
2.3603% Smart Metering Systems Plc
2.243% Jtc Plc
2.2253% Volution Group Plc
2.1714% Supermarket Income Reit Plc Ord Gbp0.01
2.1066% Alpha Fx Group Plc
2.1055% Maxcyte Inc
2.0239% Bytes Technology Group Plc
Source: Trustnet

Sector breakdown

Industrials 20.00%
Consumer Discretionary 14.00%
Financials 14.00%
Information Technology 11.00%
Communications 9.00%
Health Care 9.00%
Materials 7.00%
Money Market 6.00%
Real Estate 4.00%
Energy 3.00%

Key Investor Information - Income

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Key Investor Information - Accumulation

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