Isis, the new subsidiary from Friends Ivory & Sime, is focussing on the smaller end of the UK market with its new fund.
The UK smaller markets fund is an open-ended investment company aimed at the more sophisticated and experienced investor seeking growth. Nicholas Malins-Smith will manage the product in London.
The majority of the stocks the fund will pick will be in the UK smaller companies sector, although it will also include a small number of companies picked just before their initial public offerings. All of the companies will be chosen for their potential to deliver growth.
Initially the fund will contain around 80 stocks, although this could expand to 100 in the future. These stocks will be chosen from a range of 12 sectors, electronics, health, pharmaceuticals, leisure, media, support services, telecoms, information hardware, software, other financial, transport and general retail. Some of the companies included will be Geest, Enterprise Inns, Vosper, Tenon, Sportsworld Media and Nord Anglia.
Taking a look at some performance data from the London Stock Exchange on some of these companies, Nord Anglias share price has risen from 116p on August 28, 2000 to 291.5p on August 28, 2001 and Geest has gone from 455p to 698.5p over the same period. However, Sportsworld Media has fallen from 574p to 357p.
Malins-Smith joined Friends Ivory & Sime in 1994 and currently manages the companys UK smaller companies investment trust. Before joining Friends Ivory & Sime he was a pension fund manager for Henderson.
The UK smaller markets fund should appeal to the more experienced investor who is looking for a high-risk investment. Its success will depend on Malins-Smiths ability to cherry pick the best stocks in a market where smaller companies are more likely to go bust.
According to Standard & Poors the Friends Ivory & Sime UK smaller companies investment trust is ranked 17 out of 27 funds based on £1,000 invested on a mid-to-mid basis with net income reinvested over five years to August 28, 2001.