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Jupiter UK Smaller Companies Class I - Accumulation (GBP)

Sell:372.40p Buy:372.40p Change: 1.60p (0.43%)
Prices as at 14 June 2021
Change: 1.60p (0.43%)
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 14 June 2021
Change: 1.60p (0.43%)
Prices as at 14 June 2021
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 »

This fund aims to deliver long-term growth by investing in UK smaller companies. It could complement investments in larger UK or global companies as part of an adventurous investment portfolio. The fund is managed by Daniel Nickols, an experienced smaller companies manager, with the support of an established team. He considers both bottom-up (company specific) and top-down (economic) factors when it comes to choosing stocks - a key difference from many smaller companies funds.

While we think this fund could deliver good long-term returns for investors, we currently have high conviction in other managers within the UK Smaller Companies sector, which already feature on the Wealth Shortlist.

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

Since Nickols became lead manager in 2004, he has outperformed the benchmark by a long way. Our analysis suggests this is down to the managers stock picking ability. Remember all funds will rise and fall in value, so you could get back less than you invest.

The fund invests in medium sized companies as well as smaller companies. This means it can look quite different to its smaller companies' index, creating a different return profile. The fund's outperformance has been relatively consistent since its inception, with only two notable periods of Nickols falling behind the benchmark: at the beginning of 2009 and at the end of 2018.

Investment Philosophy

The manager believes the best long-term results can be achieved by combining stock-picking with consideration of the bigger economic picture. He thinks there are lots of opportunities in the UK smaller companies space where the market's not appreciated the true value of a company. Where that's combined with bright prospects, the manager believes the market will eventually recognise the true worth, though of course there are no guarantees.

Process and Portfolio Construction

Nickols begins with 'top down' analysis of the economy. He and the team assess current macroeconomic conditions and the outlook for economic growth, paying close attention to emerging trends across different industries. They team then form a view on which sectors are most likely to benefit based on these factors.

This is then complemented with bottom-up analysis which helps the team identify what they believe to be the best companies within these chosen sectors. The team place significant emphasis on meeting companies', where they form a view on the quality of management within the firm. Businesses must display at least one of three key characteristics to be considered for inclusion in the portfolio. These are: sustained above average earnings growth, ability to deliver unanticipated profit upgrades and the potential to re-rate relative to the market. These criteria whittle the investable universe down from over 650 companies to a portfolio of around 80 holdings.

The team are style agnostic so can invest in both growth and value stocks. This flexibility gives the manager the opportunity to take advantage of style rotations and deliver consistent performance across the market cycle, although this is not guaranteed. Ultra-low interest rates lead them to favour growth stocks at the moment and Nickols believes this is likely to remain the case for some time yet.

The fund is invested in unquoted companies, which aren't listed on a stock market, which adds risk. We expect the amount of unquoted companies in the fund to reduce and in time be sold completely.

question mark Manager Track Record Based on HL Quantitative Research

  • Merian UK Smaller Companies A Acc
  • IA UK Smaller Companies

Fund Track Record

14/06/16 to 14/06/17 14/06/17 to 14/06/18 14/06/18 to 14/06/19 14/06/19 to 14/06/20 14/06/20 to 14/06/21
Annual return 33.49% 16.15% -6.25% -6.41% 42.67%

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

Launched in 1985 as a specialist boutique, Jupiter has grown to be one of the UK's most successful and respected investment management groups. Jupiter currently manages assets spread across a range of UK and offshore mutual funds, multi-manager products, hedge funds, institutional mandates and investment companies. Jupiter has gained a reputation for achieving outperformance across a broad variety of portfolios specialising in different markets, including UK equities, Europe and bonds.

Information about the fund

Fund manager biography

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