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TB Amati UK Smaller Companies: July 2020 fund update

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.
  • The managers are experienced UK smaller companies specialists
  • Their focus on financially strong companies means they’re more conservative than many other managers in the sector
  • Their long-term performance has been excellent
  • This fund has recently been added to our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

TB Amati UK Smaller Companies aims to deliver long-term growth by investing in smaller companies that have more room to grow than larger ones. The managers are more conservative in their approach than many others in the sector, although investing in smaller companies always involves higher risk. The fund could be a useful option for adding growth potential to an adventurous portfolio mainly invested in larger companies.


The fund is managed by Dr Paul Jourdan, David Stevenson and Anna Macdonald. Jourdan began his fund management career in 1998, gaining experience in the UK, emerging markets and global sectors. He became Head of UK Equites at First State in 2004 and co-founded Amati in 2010. As well as running this fund, he is also the chief executive of Amati Global Investors.

In 2012 Jourdan was joined by Stevenson, who started his career as an accountant, then worked in various investment roles including corporate finance, private equity, and listed equity. The pair became a trio when Macdonald joined in 2018. She’d held various fund manager positions throughout her career, usually with a UK focus.

They’re supported by analyst Dr Gareth Blades, who joined in 2019. His academic and life sciences background means he’s particularly involved in researching healthcare sector companies. All team members also manage other portfolios at Amati, but they’re all focused on small UK companies too, and the majority of their time is spent on this fund.

We’ve monitored the fund and the managers for many years. Over this time our conviction in them has grown and we’ve recently decided to add the fund to the Wealth Shortlist. We admire the team’s experience, strong track record and their sensible approach, and believe they have the ability to deliver good long-term results for investors.


Although Jourdan is the fund’s longest-standing manager, it’s run using a team-based approach, with managers all proposing, discussing and challenging each other’s ideas. They look for high-quality, financially-strong and growing businesses that, because of their size, are overlooked by many other investors. These can be from tiny ‘micro-cap’ companies all the way up to those on the cusp of becoming large ones.

They start by looking at the entire UK stock market outside of the FTSE 100 index and whittle it down to a shortlist by looking at things like growth rates, sustainability of growth and cash generation. They’ll then do ‘deep dive’ research and agree as a team which companies they think are worthy of the portfolio.

The managers currently invest in around 75 companies and don’t let any holdings exceed 5% of the portfolio. Given the higher-risk nature of smaller companies, this means no single investment should ever have too much of a negative impact on the portfolio.

The fund’s also diversified in terms of sectors the managers invest in. They’re currently finding the most opportunities in the financial sector, including top-ten positions OneSavings Bank, Liontrust Asset Management and Intermediate Capital Group. The latter is currently the portfolio’s largest position, but because of its growth it recently joined the FTSE 100 index of the largest listed companies in the UK. It will therefore likely be sold at some point soon as the managers sell within one year of this happening.


Amati Global Investors, the business behind the fund, specialises in investing in small-to-medium-sized UK-listed companies. We like this dedication to this investing niche, as it means the business is solely focused on finding the best growth potential within the UK smaller companies sector.

The business is majority-owned by its employees, and all staff are encouraged to invest in it. We view this positively, as it means the managers and staff share a long-term view and it aligns their interests, and that of the business as a whole, with investors.


The fund is available for an annual ongoing charge of 0.89%. This is higher than many others in the UK Smaller Companies sector, and so the managers have a higher hurdle to deliver a positive return. They have, however, delivered value above and beyond this charge over the long term. The HL platform fee of up to 0.45% per year also applies.


The long-term performance of this fund has been very strong. Over the past 10 years it’s returned 316.2%* compared with 131.4% for the FTSE Small Cap (excluding investment trusts) index. Remember past performance doesn’t indicate future returns. Our analysis puts this down to the managers’ skills at picking companies for their long-term growth potential, regardless of their size or sector. They’ve had particular success within the financials and non-essentials consumer sectors.

The managers have usually delivered better returns than the benchmark both when markets have been rising and falling, although their strongest performance has come during the latter. That’s been shown recently as well. Although the fund hasn’t escaped the falls triggered by the global pandemic, it has held up much better than the broader UK smaller companies market.

We’d expect the managers’ focus on high-quality smaller companies to deliver good long-term performance, although there are no guarantees and investors should be prepared for volatility along the way.

10-year performance of TB Amati UK Smaller Companies

Past performance is not a guide to the future. Source: *Lipper IM to 30/06/2020.

Annual percentage growth
June 15 -
June 16
June 16 -
June 17
June 17 -
June 18
June 18 -
June 19
June 19 -
June 20
TB Amati UK Smaller Companies 7.7% 40.5% 33.6% -4.6% -2.0%
FTSE Small Cap ex Investment Trusts -3.7% 28.4% 6.4% -8.6% -12.3%

Past performance is not a guide to the future. Source: Lipper IM to 30/06/2020.

Find out more about TB Amati UK Smaller Companies including charges

TB Amati UK Smaller Companies Key investor information

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.

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