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IFSL Marlborough Special Situations Inclusive - Class A - Accumulation (GBP)

Sell:1,867.20p Buy:1,867.20p Change: 1.88p (0.10%)
Prices as at 5 August 2022
Change: 1.88p (0.10%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 5 August 2022
Change: 1.88p (0.10%)
Prices as at 5 August 2022
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

After several decades in the investment industry, Giles Hargreave recently stepped back from day-to-day management of this fund. Whilst no longer at the helm, Hargreave is still involved with the fund, taking up sector analysis responsibilities and offering guidance and knowledge to the next generation of managers.

Managers Guy Feld and Eustace Santa Barbara invest in small UK companies, including those not listed on the London Stock Exchange. Investing in emerging industries and disruptive sectors, it offers diverse exposure to the companies of tomorrow. These companies are often overlooked by other investors, which provides an opportunity for the managers to uncover hidden gems.

The fund moved from the IA UK Smaller Companies to the IA UK All Companies sector on 1 August 2021. It will remain focused on smaller companies, but the sector change means the managers have more freedom to 'run their winners'. They will be able to continue to invest in their favourite companies as they grow in size and graduate into large or medium-sized companies.

Our view on the sector

Smaller companies in the UK are among the most innovative and exciting around. They can be pioneers of an emerging industry, and adapt quickly to new opportunities. We think their long-term growth prospects are compelling. Some will blossom into the giants of tomorrow. But others will struggle or fail altogether, so they are higher risk. Unlike larger companies such as Tesco or Vodafone, which might have dozens of analysts poring over their accounts, smaller companies tend to be less researched. They might only have one or two analysts covering them which creates opportunities for eagle-eyed fund managers to spot hidden gems. Over the past decade, innovations such as the internet have allowed smaller companies to level the playing field with larger rivals. Even so, they tend to be more sensitive to the UK economy then larger companies so you should expect more ups and downs along the way. We think UK smaller companies could be a great addition to a diversified portfolio able to accept the increased volatility.

Performance Analysis

The fund has an excellent long term track record. Over the past 10 years, its outperformed peers in the IA UK Smaller Companies sector by quite some way. Whilst Hargreave has been responsible for a large part of this, the current managers use a similar process and is one we have conviction in. Remember past performance doesnt predict future returns though. All investments will fall as well as rise in value, so you could get back less than you invest.

This fund has historically held up better than the IA UK Smaller Companies sector average during falling markets, a result of its well-diversified portfolio. That said, during periods of market stress, smaller companies tend to be more volatile than large ones. Smaller companies are also less liquid their shares are harder to trade, which can heighten falls if many investors try to sell at the same time.

Investment Philosophy

Feld and Santa Barbara like companies that are easy to understand and they believe have the potential to grow significantly over time. They look beyond short-term noise and construct a long-term view. This is where we think they can add value. Before any investment is made, they like to meet with company management and assess their quality.

Process and Portfolio Construction

The team like to 'run their winners' (hold on to them for longer). Healthy balance sheets are preferred, and they don't like excessive levels of debt, although they acknowledge it may be prudent for companies to borrow money and take advantage of the current ultra-low interest rate environment.

UK smaller companies come in all shapes and sizes and with around 2,000 companies to pick from, the team are spoilt for choice. Over half of their investments are listed on the AIM index, a junior market of the London Stock Exchange, whilst several have graduated into the FTSE 250 - the index of medium sized UK companies. They invest across a broad range of industries, but the fund is currently focused towards the consumer discretionary and industrial sectors.

Smaller companies are higher risk. While some may end up several times larger, some could do badly or even go bust. To mitigate the risk of one company significantly impacting performance, the managers run a diversified portfolio of between 120-160 companies.

This fund can invest in unquoted companies. They currently only invest in a small number and don't intend to make any further investments in companies not listed on the stock market. We assess the liquidity of this fund and receive regular liquidity data from the fund group. We are comfortable that the diverse investor base and large number of holdings means the fund has adequate liquidity for retail investors. However, investors should be aware that investment in unquoted companies is higher risk and they can be considerably less liquid than those traded on established stock exchanges.

question mark Manager Track Record Based on HL Quantitative Research

  • IFSL Marlborough Special...
  • IA UK Smaller Companies

Fund Track Record

05/08/17 to 05/08/18 05/08/18 to 05/08/19 05/08/19 to 05/08/20 05/08/20 to 05/08/21 05/08/21 to 05/08/22
Annual return 11.34% -10.37% 4.16% 50.89% -24.76%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

Marlborough Fund Managers was set up in 1986 and it launched its first unit trust in 1987. The company is privately owned and based in Bolton. It remains a small niche player but has some talented fund managers, including Giles Hargreave who we rate highly, and has expanded its fund range successfully.

Information about the fund

Fund manager biography

manager photo
Manager Name: Eustace Santa Barbara
Manager start date: 1 September 2014
Manager located in: London

Eustace, a graduate of Harvard University, joined the investment team from Close Brothers in December 2013. He has worked as both an analyst and fund manager and has over 16 years' experience on the buy side. Working with Guy Feld, Eustace co-manages Marlborough Special Situations, Marlborough UK Micro-Cap Growth and Marlborough Nano-Cap Growth.

manager photo
Manager Name: Guy Feld
Manager start date: 1 January 2021
Manager located in: London

Guy, a graduate of Oxford University, has over 25 years' City experience dedicated to the research and fund management of small and mid-cap equities. He joined the investment team in 2003 and has a particular focus on the tech sector and other ?new economy' and growth companies. Working with Eustace Santa Barbara, Guy co-manages Marlborough Special Situations, Marlborough UK Micro-Cap Growth and Marlborough Nano-Cap Growth. He is also Manager of the Marlborough Technology Fund.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account