So far 2010 is proving to be a good year for small caps. After a rough couple of years they outperformed the UK All Companies sector by 2.92% in January. If you want a piece of the action, look no further than the Malborough Special Situations Fund. It is “the best small-cap fund of the last decade”, says Darius McDermott of Chelsea Financial Services in The Guardian.
Giles Hargreave has managed the fund since 1998 and is “a great stockpicker”, says McDermott. Over the past five years the fund has returned 31.86%, compared to a sector average of 14.36%.
Hargreave says his strategy has remained the same throughout his tenure. He and his team don’t make “big bets”, he tells Trustnet, instead they focus on stockpicking and regularly visit the firms they’re considering investing in. They’ve been known to visit over 1,000 firms in a year.
Another reason for the fund’s success is the flexibility of Hargreave’s investment approach. “We are not one for rules; we are flexible and will invest in anything quoted,” he says. He also commits no more than 2% of the fund to any one firm and isn’t afraid to change holdings regularly in line with the fund’s stockpicking approach.
Recently he sold technology firm Pace, saying it had had “a good couple of years recently and we decided to take the money and run”. One of the replacement holdings is Avanti Communications, a satellite broadband operator Hargreave believes will be a strong performer this year.
The fund has an initial charge of 5% (some brokers refund this) and an annual fee of 1.5%. The minimum investment is £1,000.
Contact: 0120-439 8676.
Threadneedle Emerging Market Bond Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Marlborough Special Situations Fund | 1.94 |
| Melrose | 1.88 |
| Avanti Communications Group | 1.66 |
| Anglo Pacific Group | 1.57 |
| May Gurney Integrated Services | 1.56 |
| Great Eastern Energy Corporation | 1.52 |
| Cape | 1.49 |
| Advanced Computer Software | 1.45 |
| Micro Focus International | 1.44 |
| Cove Energy | 1.39 |