Invesco UK Smaller Companies Equity (UK)

A conservatively managed fund focussing on more moderately priced smaller companies.

  • 889.79p
    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.

  • 1183.40p
    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?

  • 5.00% 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!

  • 1.67%
    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).

  • 1.67%
    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.

  • 0.00%
    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 21 September 2020, fund data last updated 19 June 2014

The fund aims to achieve capital growth by investing primarily in shares of smaller companies in the UK. The fund is benchmarked against the Numis Index, which measures the performance of the lowest tenth by value of the main UK equity market. Relative to peer group funds, the fund has more of a focus on quality companies at a reasonable price. The manager also runs an investment trust with a similar mandate which has outperformed the OEIC vehicle over the long term.

Fund summary

Sector UK Smaller Companies
Structure OEIC
Launched May, 1992
Size £577m
Yield 0.00%
Charging basis Income
Dividends paid 30 Sep

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.67%
Ongoing charges figure 1.67%

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Investment process

Benchmarked for performance purposes against the Numis Smaller Companies Index, which measures the performance of the lowest tenth by value of the main UK equity market, this fund aims to achieve capital growth, investing mainly in shares of smaller companies in the UK. The manager has a bias to the larger small companies. Idea generation comes from a number of sources including in-house research analyst team, primary markets and brokers contacts. The macroeconomic views may also highlight a particular area of the market for closer inspection and often shape the bottom-up research. The manager takes a fundamental approach to investment and targets companies that are growing, relative to the economic environment; can display quality and durability in terms of the products and services they provide; have financial strength relative to their own business environment; and whose share price is attractive in relation to the quality and growth prospects. The portfolio construction is based on the outputs of bottom-up stock research, which is informed by the top-down macro views. Portfolio is well diversified which means that individual stock positions would rarely exceed 4% of the total portfolio. There is a contrarian style tilt as the manager will top-slice positions in stocks where prices have been appreciating, and will build up holdings in stocks that have been in decline, provided the business cases are still intact.

Invesco Perpetual’s UK smaller companies manager Richard Smith has retired with Jonathan Brown taking on sole management of the fund as well as its closed-ended version, UK Smaller Companies IT, from December 2013. Brown has been co-managing the funds with Smith since March 2011 and, as he does not have a track record in his own right, we took the decision to remove the fund from our buy list in 2011. We have other more highly rated funds in the UK small cap equity arena.

Manager research

Average monthly relative returns

  • 15/16 0.53%
  • 16/17 0.70%
  • 17/18 0.56%
  • 18/19 0.82%
  • 19/20 0.38%

Bestinvest MRI

  • 3 years 0.58%
  • 5 years 0.60%
  • Career 0.54%
  • 3 years 97.10%
  • 5 years 99.80%
  • Career 100.00%

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

Jonathan Brown

Brown began his investment career with Lazard Asset Management in 1997, where he specialised in private client fund administration, before joining Invesco Perpetual in 2000. In 2004 Brown joined their UK Equities team as a trainee fund manager and, after three years specialising in the UK small cap sector, became a fund manager in his own right. Brown graduated with a BSc in Bio-Chemistry from UMIST and has also secured both the Investment Management Certificate from the CFA Society of the UK and the Securities Institute Diploma.

Track record

Jonathan Brown has 6.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.54%. During the worst period of relative performance (from March 2020 - July 2020) there was a decline of 6% 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% (December 2019 - March 2020)
Relative -6.00% (March 2020 - July 2020)

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

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Top 10 holdings

Data accurate as at 31 July 2020

5.01% Future Plc
3.6% Cvs Caremark Corp
3.52% Jtc Plc
2.88% 4imprint Group Plc
2.83% Clinigen Group Plc
2.63% Ultra Electronics Hldgs
2.37% Sanne Group Plc
2.35% Ncc Group
2.27% Hilton Food Group Plc
2.25% Sdl
Source: Trustnet

Sector breakdown

Industrials 30.00%
Consumer Services 20.00%
Financials 19.00%
Technology 13.00%
Health Care 6.00%
Consumer Goods 5.00%
Oil & Gas 3.00%
Money Market 3.00%
Basic Materials 1.00%

Portfolio

The manager holds a well-diversified portfolio of around 100 stocks. The top ten will usually account for around 15–20% of the portfolio.

Constraints

Usually up to 4% in a single stock.

Key Investor Information - Income

Download

Key Investor Information - Accumulation

Download