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Julian Gibbs

Rarely in over 40 years in financial services have I met a fund manager so dedicated as Stuart Sharp of BWD. His BWD smaller companies fund, in which he has a substantial investment himself, is the top performer of all smaller company funds over 10 years and is in the top six over three and five years.

The fund is up by over 400 per cent in the past 10 years – beating all but two of the funds in the much bigger UK all companies sector.

At least 80 per cent of the portfolio is invested in stocks with a market capitalisation of £800m or less although some which become mid-caps will continue to be held if their shares are undervalued.

Sharp has achieved this tremendous success by building contacts with 26 UK stockbrokers specialising in smaller companies. He believes, quite rightly, that a lot of local stockbrokers can get information to him first before it spreads to the general market.

He and his team make 250 company visits annually so that they can make an objective assessment. They look at the track record of board members and how they are incentivised, as well as taking into account their reputation in the industry, their vision, general ability and energy.

Sharp also takes profits when his holdings become overvalued and buys them back again on weakness. He has won many awards, the most prestigious recent one being the Fund Strategy Citywire Funds Insider Award 2001.

Unlike many other star fund managers, Sharp is most unlikely to leave BWD and should be there for at least another 10 years.

This comparatively unknown fund is only £50m in size and is still small and flexible enough to make the most of undervalued opportunities. It should definitely be a fund recommended for all growth investors.

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