River and Mercantile might not be one of the biggest names on the block, but its smaller companies fund has a good track record.
During 2014 many small-cap funds have struggled to match the performances of previous years, but the fund – one of the “most successful” in finding value in small caps, says Jeff Prestridge in The Mail on Sunday – has delivered a 25% uplift compared to the 6% UK Smaller Companies’ sector average.
It’s also done well over longer periods – generating 128.7% over three years and 157% over five years, in excess of the sector average.
So investors might be worried to hear a new manager, Philip Rodrigs, is taking over the UK Equity Smaller Companies Fund, says Prestridge. But they shouldn’t be. Rodrigs has done very well as manager of rival Investec UK Smaller Companies Fund and has been “headhunted” to take over from the current chief stockpicker, Daniel Hanbury.
Rodrigs, who has been shadowing Hanbury for six months, says it will be “business at usual”. The fund aims to invest in the bottom 10% of UK stocks in market value and to deliver capital growth. Rodrigs will follow River and Mercantile’s ‘PVT’ approach, which focuses on ’potential, valuation and timing.
Just over 30% of the fund is in industrials, with 20% in consumer services and 15% in financials. Recent poor performances by Quindell and Blur Group has been offset by strong showings by SuperGroup, Pace and Severfield-Rowen. The fund should suit investors comfortable with the risks of more volatile stocks and the annual management fee is 0.75%.
Contact: 020-7601 6262.
| Top ten holdings | |
|---|---|
| Name of holding | % of assets |
| Utilitywise | 2.9% |
| Optimal Payments | 2.5% |
| FDM Group | 2.4% |
| Redcentric | 2.2% |
| Staffline Group | 2.2% |
| Card Factory | 1.8% |
| Safestyle UK | 1.8% |
| Restore | 1.8% |
| Clinigen | 1.6% |
| SkyePharma | 1.5% |