Trust makes tasty gains as it builds on Britain’s fortunes
F FUND manager Harry Nimmo is in a good mood – and he and his i investors have ev every reason to be.b The investmentinvestmen trust he runs, StandardS dd Lifeif UK Smaller Companies, is enjoying strong form and as long as the UK economy prospers, Nimmo sees no reason why it cannot keep delivering more of the same.
A thriving UK economy is music to Nimmo’s ears because it vindicates his decision to build a portfolio based primarily on Britain’s fortunes. Most of the fund’s 57 holdings – such as clothing retailer JD Sports, comparison website MoneySupermarket and baker Greggs – are focused on consumers here, and they are little affected by events on the Continent or China.
In simple terms, when the UK is in growth mode with unemployment falling, new jobs being created and earnings rising at a pace above inflation, his trust can do little wrong.
The numbers speak for themselves. Over the past year, it has delivered returns of 31 per cent, beating that delivered by the average UK smaller companies trust (27 per cent) and the FTSE All-Share Index (7 per cent).
‘It’s an exciting time for the trust,’ says Nimmo, beaming from his eyrie in Edinburgh, where Standard Life runs its asset management business. ‘There has never been a time when so many of the trust’s holdings have exceeded expectations.’
Nimmo’s trust has the scope to invest in all but the biggest 170 UK-listed companies – meaning he can invest in many FTSE 250 stocks as well as those on AIM. But meticulous research, based on identifying ‘resilient’ firms with growth momentum, means he has a shortlist of 100 from which he picks suitable candidates.
Nimmo also runs Standard Life Investments UK Smaller Companies, set up as a fund rather than an investment trust. It is four times the size of the trust and has many common holdings, but its size prevents it from investing in some of the minnows – companies with market values of less than £200million – that the trust holds.
Alan Steel, of independent financial adviser Alan Steel Asset Management in Linlithgow, West Lothian, is a Nimmo fan. He says: ‘He has an investment process that he sticks to through thick and thin. We’ll back him until his performance says otherwise.’