A beginner’s guide to investing in small-caps in 2024
Investing in the stock market can be a rewarding yet challenging endeavour. For those looking to ...
On this day in 1966, while England was still basking in World Cup glory, the average cost of a house was £3,620 and the average annual wage was £891, Star Trek made its television debut.
Documenting the voyages of Captain James T. Kirk and the crew of the Starship Enterprise, it was one of my dad’s favourite programmes. I can remember many evenings sat curled up with him, watching The Original Series, followed by The Next Generation (resistance was futile*).
To mark the occasion for all fellow Trekkies, I have picked out some Elite Rated fund managers who explore asset classes, seek out new investment opportunities and boldly go where no manager has gone before**.
Investment Trust Shin Nippon, which means ‘new Japan’, focuses on emerging or disrupted sectors, where the manager sees innovative growth opportunities. The team delve into the small-cap market, where many other firms fear to tread. This gives them ample opportunity to uncover hidden gems and they are prepared to bide their time while these companies reach their full potential. This trust is best suited for investors who are interested in the growth potential that Japanese smaller companies can provide, but who understand these stocks are higher risk and can prove volatile.
This fund targets income stocks in the small cap space – an area that is often overlooked by other income managers. It aims to combine dividend growth with capital appreciation. The acclaimed stock-picking ability of the team has generated significant outperformance since the fund launched in July 2011. A well-resourced fund that offers something radically different from the majority of large-cap FTSE 100 income funds. The team is renowned for their experience in this area of the market.
The manager of this fund has proved adept at delving into parts of the investment grade bond market that are often overlooked or avoided by other managers, to successfully identify bonds with superior risk-adjusted returns. The manager pays particular attention to the asset-backed sector and unrated bonds. The fund manager goes beyond simply focusing on credit quality analysis and goes into painstaking detail, analysing covenant documents to estimate not only the chance of default, but the expected recovery rate too.
This fund has a very flexible approach. The team invests across the whole range of fixed interest assets and aims to take advantage of changes in market conditions. This fund has an attractive yield, and is managed with an emphasis on credit risk to ensure protection of investors’ capital and income wherever possible. The team’s specialist skills mean that they can, and do, invest in areas of the market where others may fear to tread, such as subordinated financial debt and asset-backed securities.
*Source: The Borg.
**The infinitive splitting, opening narration, famously recited by William Shatner. Please note I am blatantly using poetic licence here. Other managers have ‘gone there’ before, just not many of them. It would be better to say that “the funds listed have managers whose expertise allows them to invest in assets less well-trodden by many of their peers” – but that doesn’t work as well with the theme!
**Based on the Vulcan greeting “Live long and prosper”.