Standard Life (LON:SL) Uk Smaller Co Trust (LON:SLS) aims to generate long-term capital growth from a portfolio of high-quality smaller-cap UK equities. Manager Harry Nimmo follows a long-standing, consistent investment process to construct a relatively concentrated portfolio of c 55 high-conviction holdings. SLS’s NAV total returns are ahead of the benchmark Numis Smaller Companies ex-Investment Companies index over three, five and 10 years and SLS leads the pack versus peers over 10 years. SLS’s annual dividend has compounded at an average annual rate of 23.5% over the last 10 years.
Investment strategy: Quality and high conviction
Harry Nimmo has a long-standing, disciplined investment process with a three-step approach – top-level, qualitative guidelines, a stock selection matrix and fundamental analysis. He aims to invest in quality companies with sustainable long-term growth in earnings and dividends. The matrix is used to sift c 800 companies in the investable universe and has a range of factors including earnings and revisions momentum, balance sheet strength, stock price momentum and valuation. Fundamental analysis is rigorous and company meetings are considered an important part of the investment process. The manager is responsible for the level of gearing; 5% cash to 25% debt as a percentage of net assets is permitted; the level of debt has typically been between c 4% and c 9% over the last five years.
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