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Janus Henderson UK Smaller Companies I

A more conservative UK small company fund investing in quality growth stocks.

  • 1247.00p
    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?

  • 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).

  • 0.85%
    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.

  • 0.60%
    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 April 2021

This London-listed investment trust aims to maximise total returns for shareholders by investing in smaller companies that are quoted in the UK. Smaller companies’ shares can be more volatile and less liquid than larger company shares, so smaller companies funds can carry more risk.

Fund summary

Sector UK Smaller Companies
Structure OEIC
Launched December, 1989
Size £209m
Yield 0.60%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.85%

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Investment process

The portfolio is structured with the aim of outperforming the Numis Smaller Companies Index, which accounts for the equivalent of the bottom 10% of the FTSE All-Share index. The manager is, however, prepared to 'ride' his winning stocks until they enter the FTSE 100. The investment style follows a bottom up, quality GARP approach with the emphasis primarily on strength of business model (margin structure), management team, financial structure (cashflow) and earnings momentum. The valuation metrics used vary according to the sector being analysed; the most frequently used measures are EV/EBIT and P/E, which provide relative and absolute measures respectively. Low margin, low growth businesses or those whose value can be difficult to assess, such as technology or biotech companies, are typically avoided. Portfolio construction is primarily bottom up. Stock ideas are the result of company meetings, third party research, earnings surprises / revisions. Portfolio turnover is generally low.

Manager Neil Hermon adopts a 'Growth at a Reasonable Price' approach and will typically target cash generative companies, growing earnings, while avoiding situations where it is difficult to quantify the value of a company. This typically leads the manager towards more traditional sectors. The annual fund management charges are also amongst the lowest in its sector. This is managed identically to the Henderson Smaller Companies Investment Trust

Manager research

Average monthly relative returns

  • 16/17 -0.10%
  • 17/18 0.79%
  • 18/19 -0.06%
  • 19/20 0.95%
  • 20/21 -0.25%

Bestinvest MRI

  • 3 years 0.21%
  • 5 years 0.27%
  • Career 0.13%
  • 3 years 81.90%
  • 5 years 92.20%
  • Career 99.40%

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

Neil Hermon

After graduating from Cambridge University, Hermon spent three years at Ernst and Young where he qualified as a Chartered Accountant. In January 1993 he joined General Accident Investment Management as a UK Smaller Companies analyst. In June 1994 he was promoted to Fund Manager and Head of the UK Smaller Companies team. After nearly 10 years at Morley Fund Management Hermon joined Henderson Global Investors in November 2002 as Head of UK Small Companies with specific fund management responsibility for Henderson Smaller Companies Investment Trust. He is an Associate of the Society of Investment Professionals.

Track record

Neil Hermon has 20.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.13%. During the worst period of relative performance (from December 2004 - March 2010) there was a decline of 19% relative to the index. The worst absolute loss has been 56%. 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 -56.00% (May 2007 - February 2009)
Relative -19.00% (December 2004 - March 2010)

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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Top 10 holdings

Data accurate as at 31 July 2020

2.9% Bellway
2.5% Team17 Group Plc
2.4% Ultra Electronics Hldgs
2.3% Clinigen Group Plc
2.3% Gamma Communications Plc
2.2% Renishaw Plc
2.1% Learning Technologies Group Plc
2% Rws Hldgs
2% Integrafin Holdings Plc
1.9% Oxford Instruments
Source: Trustnet

Sector breakdown

Industrials 34.00%
Financials 20.00%
Consumer Goods 12.00%
Consumer Services 11.00%
Technology 8.00%
Health Care 6.00%
Basic Materials 3.00%
Oil & Gas 3.00%
Telecommunications 2.00%
Money Market 1.00%

Portfolio

Approximately 90 holdings, individual positions will not usually exceed 3%. Portfolio turnover is generally low.

Constraints

Constraints relative to HGSC: stocks +/-4%, sector +/- 8%. Historical tracking error relative to HGSC is 4-8%, although there are no formal tracking error limitations.

Key Investor Information

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