Franklin UK Smaller Companies A

  • 1070.15p
    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.

  • -
    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?

  • 4.50% 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!

  • 1.50%
    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).

  • 1.58%
    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.

  • 0.80%
    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 09 July 2020, fund data last updated 25 April 2018

This a more focused UK small-cap fund investing in companies from the Numis Smaller Companies index including AiM, i.e. the bottom 10% of the UK stockmarket by value. Managers Paul Spencer and Richard Bullas aim to achieve capital growth exceeding that of the index over the medium to long term (meaning 3-5 years). The managers have no deliberate style bias, running the mandate using a combination of quality growth, cyclical recovery and value approaches.

Fund summary

Sector UK Smaller Companies
Structure OEIC
Launched
Size £275m
Yield 0.80%
Charging basis Income
Dividends paid May, Nov

Charges

Standard initial charge 4.50%
Initial charge via Bestinvest 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.58%

Allocation

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Investment process

At least 80% of the portfolio will be invested in companies with a market cap of between £100m to £1.5bn. A top down perspective on the macro environment guides the stock selection process. The managers favour established quality companies, the emphasis being on business risk (sustainability of earnings), balance sheet risk (avoiding meltdowns) and management risk (delivery of strategy). Though quality is important, valuation is paramount and the managers assess both upside and downside with EV to EBITDA being the preferred metric. The final portfolio will consist of three types of companies: - Quality growth (40%). Structural growth companies with a strong market position and a record of delivery; - Cyclical & Recovery (40%). Good quality companies, well-managed but going through a challenging period and well-placed to benefit from self-help or end market recovery; - Undervalued and overlooked (20%). Companies whose valuation doesn’t reflect company strength or profit potential.

The fund underwent a significant restructuring following the appointment of Spencer and Bullas in 2012, and is now run using the same investment process employed by Spencer on the Franklin UK Mid Cap fund from 2006. Since their appointment they have replicated the success of the Mid Cap fund, rewarding investors with performance significantly in excess of the index. Performance can be volatile, however. The fund has the advantage of being a relatively small offering (£308m AUM as of September 2018) enabling the managers to be more nimble relative to many of their peers.

Manager research

Average monthly relative returns

  • 15/16 0.00%
  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%

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

Track record

Periods of worst performance

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Relative 0.00% ()

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.

Allocation

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Sector breakdown

Industrials 45.00%
Financials 17.00%
Consumer Goods 13.00%
Technology 10.00%
Cash & Cash Equivalents 5.00%
Consumer Services 5.00%
Health Care 4.00%
Basic Materials 1.00%

Portfolio

40-50 stocks. Position size 1.5-5%.

Key Investor Information

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