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Marlborough Special Situations - change of sector

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

The Marlborough Special Situations Fund will move from the IA UK Smaller Companies sector to the IA UK All Companies sector on 1 August 2021.

To be eligible for inclusion in the UK Smaller Companies sector at least 80% of a fund must invest in UK companies within the bottom 10% of the UK market by size. These are defined as UK smaller companies.

Marlborough is updating the fund’s investment policy, meaning it will no longer meet this requirement. The fund will now invest at least 60% in UK smaller companies, which will be defined as those below £2.5bn in size at the time of purchase.

While the fund will no longer be in the IA UK Smaller Companies sector, it will remain focused on smaller companies. But the sector change means the managers will 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.

Guy Feld and Eustace Santa Barbara, the fund’s managers, believe smaller companies have the potential to outperform over time. These changes mean they can hold successful, growing companies for even longer. They will not be forced to sell companies they like just because they’ve grown to a certain size.

What happens next?

There will be no change to the fund’s investment process or its long-term aim to grow investors’ capital. The managers run a diversified portfolio of around 130 stocks. This helps to mitigate the risk of one company significantly impacting performance, although smaller companies are higher risk.

We do not believe investors need to take any action following the announcement, providing the fund still meets their objectives and they are happy with more exposure to medium-sized and larger companies. The fund does not currently feature on the Wealth Shortlist of our favourite funds across the major sectors.

Find out more about the fund, including charges

Key investor information

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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