Aim: Growth by investing in UK smaller companies
Minimum investment: Lump sum £1,000. monthly £25
Investment split: 100% in UK smaller companies
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial up to 3.25%, renewal 0.5%
Tel: 020 7562 3350
The SF T1ps smaller companies growth fund is the first from t1ps Investment Management, a subsidiary of media and financial services group Rivington Street Holdings. It will be managed by small cap share tipster Tom Winnifrith.
Looking at how this product fits into the market Arcturus Investments director Dane Halling says: “A higher risk fund such as this may find the current headwinds a challenge, although if T1ps gets off to a good start over the next six months or so that would be impressive and would undoubtedly attract more interest in the fund.”
Halling notes that fund manager Tom Winnifrith has been very active in the small and micro cap niche for a number of years. “It’s good to see him and his research team putting their reputations on the line. It is harder to put up strong numbers in a consistent fashion on a diverse fund with built-in costs than it is to build a stock recommendation track record,” says Halling.
Halling highlights the manager’s enthusiasm for the markets and researching stocks. “Experience in dealing in small cap stocks is very important as well, as dealing spreads can hamper performance unless one deals with skill,” he says.
Discussing the potential weaknesses of the fund Halling says: “Investors should recognise there is a world of difference from making money in specific individual shares that have been recommended by T1ps in the past to making long term returns in a diversified portfolio of 20-25 names.”
Halling also feels the charging structure may not be attractive to some investors and advisers who are not used to dealing in bonus fees. “I would have liked to have possibly seen a high water mark clause built in to align investor and manager interests more closely.
“The highest net asset value of a fund to date is known as the high water mark. If the NAV of a fund declines during a year, no performance fee will be payable to the investment manager. If the NAV subsequently increases over the following year back to the high water mark, but no higher, the high water mark prevents the investor from being charged a performance fee on that increase.”
Scanning the market for possible competitors Halling cannot recall a fund launch from an investment newsletter organisation in recent times. He says: “The recently launched Octopus small cap fund, which has a similar value based approach comes to mind.”
Halling draws attention to the fact that Winnifrith is investing his entire pension in this fund and other directors Rivington Street Holdings are also backing this fund with their own cash. “This is something we really like to see. The management team’s interests will be aligned with those of investors,” says Halling.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average