Good things come in small packages: Elite Rating awarded to two hidden gems

The Ashburton India Equity Opportunities and Hermes US SMID Equity funds have each gained an Elite Rating from FundCalibre.

Darius McDermott, managing director of FundCalibre said: “Both these funds look beyond just the big names in their stock markets, scouring the opportunities amongst smaller and medium sized companies to find the best growth ideas. With just £500m assets under management collectively, the funds themselves are also small and nimble – proving in more ways than one that bigger isn’t always better.”

Ashburton India Equity Opportunities

Whilst the Indian stock market is dominated by large companies, the team of three managing this fund believe that many strong growth prospects can also be found in smaller and medium sized companies outside the index. They observe and analyse the economy first before looking for individual stock ideas across different industries. They have courage in their conviction with a concentrated portfolio of just 20-30 stocks, just over half of which are large cap, a third mid cap and the remainder small cap. We like the managers’ prioritisation on investing in well-managed companies that have the interests of the minority shareholders front of mind.

Hermes US SMID Equity

This fund invests solely in US small and medium-sized companies. The manager, Mark Sherlock, starts by looking at the Russell 2500 index and removing any companies with high debt, those that need a lot of reinvestment and those whose products and services can be easily replicated. He will then look at the quality and consistency of earnings before assessing valuations. Against a market notoriously difficult to beat, Mark has built an enviable track record, and the lower risk approach to the otherwise higher risk investment area of small and mid caps is grounded by a solid and understandable process with sensible constraints, but enough flexibility to give the fund a great opportunity to excel.

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.