According to the data, seven of the twenty top-performing and most consistent investment companies of the last decade are from the UK smaller companies sector, continuing a trend seen last year.
“It’s interesting to see that the UK smaller companies sector has continued to dominate this year but there’s no telling what the future holds,” the AIC’s communications director Annabel Brodie-Smith said.
The latest AIC research indicates a correlation between performance and fund manager longevity. 12 out of 20 of the strongest performing companies of the decade have been managed by the same manager for at least a decade. 15 out of 20 have been managed by the same manager for at least eight years.
“Particularly striking is the relationship between fund manager longevity and consistently strong long-term performance. And at a time when tight investment company discounts are very much in the spotlight, it’s interesting to see that a number of the twenty most consistent performers are on double digit discounts,” Brodie-Smith commented.
The top performer
The most consistently strong performing investment company is the Standard Life UK Smaller Companies headed by star manager Harry Nimmo who has managed the fund since its launch in January 1997. Over ten years, a £100 investment into the company has grown to £650, the AIC research showed.
According to Nimmo, smaller company valuations have risen in recent months on the back of domestic economy improvement and strong performance of the asset class. But he warned that the strong year-to-date performance signals a more selective approach.
“We prefer to focus on underappreciated businesses in control of their own destinies. In particular, those demonstrating durable earnings trends and strong cashflow generation whatever the market environment should prove more resilient and outperform in the long term,” he said.
Runners-up
The second most consistently strongly performing investment company of the decade is Dunedin Smaller Companies (UK Smaller Companies), managed by Ed Beal for the last eight years. Lindsell Train is in third place (Global), managed by Nick Train for thirteen years. In fourth position is Keystone Investment Trust (UK All Companies) sector, managed by Mark Barnett for the last eleven years. The fifth most consistently strong performing investment company of the last decade is Law Debenture Corporation (Global), managed by James Henderson for the last eleven years.
