Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Regional smaller companies

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
tgboswell
Posts: 13
Joined: July 25th, 2021, 8:19 pm
Has thanked: 26 times
Been thanked: 6 times

Regional smaller companies

#432572

Postby tgboswell » August 5th, 2021, 1:51 am

Instead of holding global smaller companies, I'm thinking of holding regional. What funds/ investment trusts would you recommend for UK Smaller Companies, Japanese Smaller Companies, European Smaller Companies, US Smaller Companies and Asian Smaller Companies-ex Japan? I'm 28 years old and will be investing in a SIPP. What do you hold as regional smaller companies?

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Regional smaller companies

#432625

Postby ADrunkenMarcus » August 5th, 2021, 9:18 am

tgboswell wrote:Instead of holding global smaller companies, I'm thinking of holding regional. What funds/ investment trusts would you recommend for UK Smaller Companies, Japanese Smaller Companies, European Smaller Companies, US Smaller Companies and Asian Smaller Companies-ex Japan? I'm 28 years old and will be investing in a SIPP. What do you hold as regional smaller companies?


I hold Standard LIfe UK Smaller Companies investment trust in my SIPP and it's performed very strongly. Another one is BlackRock Smaller Companies, which I have in my dividend growth portfolio; Blackrock Throgmorton is another one you may wish to look at.

Aberdeen Standard Asia Focus investment trust has an illustrious record. It has gone through a relatively lacklustre period but seems to be picking up.

Best wishes


Mark.

shawsdale
Lemon Pip
Posts: 54
Joined: June 3rd, 2017, 7:08 am
Been thanked: 55 times

Re: Regional smaller companies

#432716

Postby shawsdale » August 5th, 2021, 4:53 pm

The answer to this question partly depends on whether you have a preference for growth-oriented or value-oriented smaller company strategies as well as whether you have a preference for small or very small companies.
As you are a youthful SIPP investor with presumably a very long-term horizon and a willingness to tolerate the shorter-term volatility of smaller companies it's possible that growth-tilted strategies will be more attuned to your risk appetite.
Given that, here are some 'growth' suggestions:

UK: River and Mercantile Microcap trust (RMMC)
Europe: Montanaro European Smaller Companies trust (MTE)
Global: Edinburgh Worldwide (EWI); Smithson (SSON)
Japan: Baillie Gifford Shin Nippon (BGS)
Tech: Herald Investment Trust (HRI) global, but with a large UK weighting.

The following are more value-oriented if you're interested in exploring that style:
UK: Chelverton UK Dividend Trust (SDV)
Asia: Fidelity Asian Values (FAS)
Japan: AVI Japan Opportunity (AJOT); Nippon Active Value (NAVF); these two being activist trusts attempting to unlock the value they perceive to be embedded in cash-rich Japanese company balance sheets.

My knowledge of the US smaller companies options is limited, but when I last looked the two investment trusts in that space seemed to have less impressive track records than some of the open-ended US smaller company funds such as those of JPM, Artemis, Threadneedle. Premier Miton US Smaller Companies did very well for a while, but not so lately.
The rotation(s) between growth and value in 2020/21 seem to register very sharply in the relative performance of US smaller companies funds and trusts. So value-tilted US funds like Legg Mason US Small Cap Opportunity and VT De Lisle look very strong over 1 year, but less so longer-term, given the pre-2020 struggles of value as a style.
One of the US smaller company investment trusts, was it formerly Jupiter(?), recently changed manager to Brown Advisory.

There are also a number of open-ended UK smaller companies funds with good track records such as Octopus UK Micro Cap Growth and Liontrust UK Micro Cap.
Frustratingly there is a very impressively performing open-ended US Micro Cap fund - Heptagon Driehaus - which I could never find on any of the main platforms and I think it may be closed to investors.

If I were in my late 20s I'd want to have some exposure to micro caps in the growth-focused part of a long-term portfolio.
There are good liquidity-related reasons why a closed-end fund structure may be the best investment vehicle for the micro cap end of smaller companies.

Finally, you might want to explore Chrysalis Investments (CHRY) which has a focus on pre-IPO growth companies. I think it's trading well above the last reported net asset value at the moment, but I don't know it well.

I'm sure there are other funds and considerations I've missed, but I hope the above is of some use.

AWOL
Lemon Slice
Posts: 563
Joined: October 20th, 2020, 5:08 pm
Has thanked: 366 times
Been thanked: 277 times

Re: Regional smaller companies

#433192

Postby AWOL » August 7th, 2021, 10:53 pm

The post above is a good answer. On the US side you may wish to consider an ETF as the USA is a very efficient market and the trusts in that area tend to outperform for a short period sucking investors in and then lose their way. My choice would be ISP6 if you wish to do this. However US small caps are richly valued and I'd probably build up this holding over time or by buying during dips.

billG
Posts: 27
Joined: December 15th, 2016, 7:11 pm
Has thanked: 22 times
Been thanked: 21 times

Re: Regional smaller companies

#434669

Postby billG » August 14th, 2021, 12:43 am

If you buy a global smaller company trust/fund then the fund manager will make some decisions as to allocations to different regions. By buying regional equities you are in effect doing this yourself. It maybe worth looking at the allocation made by the professionals as a guide to your choices.
As a rough guide many will roughly reflect the global market sizes which means they will contain 50+ of US stocks.
I have gone down the regional route like you are proposing. My holding are: UK(HSL, BRSC), US(ISP6), WORLD(EWI), EUR(TRG), ASIA(FAV), JAPAN(BGS)
Good luck


Return to “Investment Strategies”

Who is online

Users browsing this forum: No registered users and 7 guests