Fund of the week: Skilled stockpicker brings in predictable profits
Skilled stockpicking is the key to small-cap management, as demonstrated by our Fund of the Week: Framlington UK Smaller Companies. Manager Roger Whiteoak shares his strategy.
"Small-cap management is not about benchmarking; it's about skilled stockpicking," says Patrick Connolly of independent financial planners John Scott & Partners, and Framlington UK Smaller Companies' Roger Whiteoak is one of only about half a dozen managers who have done that "consistently well over a long period of time", he tells What Investment.
Named as Investment Week's UK smaller companies fund manager of the year in 2005, Whiteoak has been unworried about many investors shifting to mid-cap stocks. "If we could make some money in the FTSE 250 I'd move, but we're seeing some good small firms with great potential," he tells Investment Adviser. The strategy seems to be paying off. Over the past three years, the fund has returned over 130% against 60.3% for the FTSE Small Cap index. And unlike other growth managers, he has resisted the temptation to concentrate his portfolio, says Fund Strategy. Instead, he has 80% of the fund in 80 stocks, which he calls "profitable and predictable". The rest is in 70 other stocks that are small, but "when they work, they work very well", he says.
Hargreaves Landsdown approves, and says that this strategy of diversification helps spread risk, "which is important when investing in this higher-risk area".
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
Name of holding % of assets
Umeco 2.7%
Headlam Group 2.6%
Findel 2.2%
Fenner 2.0%
Enterprise 1.8%
Axis-Shield 1.7%
Rathbone Brothers 1.6%
Gyrus Group 1.5%
Aveva Group 1.5%
Cambrian Mining 1.4%
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
What Keir Starmer's ‘Plan for Change’ means for you - six milestones explained
Prime Minister Keir Starmer has set out six milestones that the public can judge the government by - we reveal Labour's top policy targets
By Marc Shoffman Published
-
Cash savings exodus predicted amid stocks and shares optimism
Poll of financial advisers suggests optimism for the equity market and a move away from cash, but that growth could come at the cost of higher volatility
By Dan McEvoy Published