Fund in focus: a play on British mid-caps
Outsize bets on the housebuilders have paid dividends for this UK-focused mid-cap fund.
Don't be fooled by the name Henderson Smaller Companies Investment Trust (LSE: HSL) is more of a play on UK mid-cap shares than a fund for those looking to profit from penny stocks. Cambridge mathematics graduate Neil Hermon has been running the fund since 2002, and it currently has around two-thirds of its holdings in the FTSE 250.
Not that that's done it any harm. The trust is a solid long-term performer over ten years it's the third of 13 investment trusts in the UK Smaller Companies sector, according to Citywire, returning just over 280% across that time. The results are similarly strong over three (94.3%) and five years (156%) and it has consistently beaten its benchmark.
Outsize bets on the housebuilders have been one major factor in the trust's recent performance, with the sector buoyed by low interest rates and government support, Hermon tells Leonora Walters in Investors Chronicle Bellway remains his top holding. He's also looking at picking up promising-looking oil companies while the sector is in the doldrums. Companies he likes in the area include Premier Oil, which is "financially sound" despite "reasonable levels of debt", and Cairn Energy, which he likes because of its "strong balance sheet with a substantial net cash position".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The ongoing charge is 0.88%. That's made up of a 0.35% management fee plus a performance fee of 15% of any outperformance of the benchmark, with total fees capped at 0.9% of average net assets over the year. It currently trades on a discount to net asset value (in other words, you can buy the underlying portfolio for less than it's worth) of around 7.5% (though note that this is a relatively narrow discount compared to the past).It also pays a dividend yield of around 2%.
Bellway | 3.7% |
E2V Technologies | 2.7% |
Paragon Group of Companies | 2.2% |
Howden Joinery Group | 2.2% |
Informa | 2.1% |
Interserve | 2.0% |
NMC Health | 1.9% |
WS Atkins | 1.9% |
Victrex | 1.9% |
Playtech | 1.9% |
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
8 of the best riverside properties for sale
The best riverside properties for sale – from a Grade II-listed former mill house with views over the River Chelmer in Essex, to a townhouse on a Georgian terrace overlooking the Avon Gorge in Clifton, Bristol
-
Will “Liberation Day” strike again?
Donald Trump’s 90-day tariff pause comes to an end on 9 July. Can we expect further market turmoil?