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Wealth Shortlist Update: Marlborough UK Micro-Cap Growth

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.

We have taken the decision to remove the Marlborough UK Micro-Cap Growth fund from the Wealth Shortlist. We continue to have high conviction in co-managers Eustace Santa Barbara and Guy Feld. But we want the fund to remain at a size which allows the managers to make the most of the opportunities presented to them. This is not a decision based on a change in our view of the managers, or a reflection of their performance.

Long-term investors in this fund have been rewarded for backing a great smaller companies team. Veteran fund manager Giles Hargreave delivered exceptional returns since launching the fund in 2004. He stepped back from day-to-day management duties at the start of this year and his successors Guy Feld and Eustace Santa Barbara have also done an excellent job at finding small companies with big potential. Hargreave is still involved with the fund and we positively rate Marlborough’s UK smaller companies team. Smaller companies are riskier than investing in larger ones, and performance can be more volatile. But together the managers’ long-term performance has been excellent.

Since the fund was added to the Wealth 150, a predecessor of the Wealth Shortlist, in July 2007, the fund has delivered strong performance for investors. The fund has returned 519.6%* versus 233.8% for the IA UK Smaller Companies sector and 140.4% for the FTSE Small Cap (ex-Investment Trust) index. Please remember past performance is not a guide to future returns.

Annual percentage growth

Jun 16 - Jun 17 Jun 17 - Jun 18 Jun 18 - Jun 19 Jun 19 - Jun 20 Jun 20 - Jun 21
Marlborough UK Micro-Cap Growth 43.6% 17.5% -3.7% -0.8% 62.7%
IA UK Smaller Companies 36.2% 17.1% -0.6% -5.6% 53.3%
FTSE Small Cap ex Investment Trust 28.4% 6.4% -8.6% -12.3% 65.2%

Past performance is not a guide to the future. Source *Lipper IM to 30/06/2021

Marlborough UK Micro-Cap Growth performance since Wealth Shortlist inclusion (previously Wealth 150/50)

** Contains estimated data

Past performance is not a guide to the future. Source: Lipper IM to 30/06/2021.

Our analysis suggests the managers have added value through their stock-picking talents. They’ve achieved this across a diverse range of sectors, such as financials, healthcare, technology and consumer discretionary. We think this shows the managers’ broad-ranging skills in identifying companies for their long-term growth potential.

Please note as with all investments, there is the potential for your capital to fall as well as rise in value, so you could get back less than you invest.

Why is the fund being removed from the Wealth Shortlist?

This fund invests in some of the smallest companies in the UK stock market, including higher-risk unlisted companies. This means that we think there is an optimal size and number of investors in the fund given the less liquid nature of smaller companies – in order for it to continue to be nimble and get the best possible opportunities for investors. We recognise that in continuing to have the fund on the Wealth Shortlist the fund is likely to grow larger and this might not be in the best interests of existing holders of the fund in our view.

The Marlborough Multi-Cap Income fund remains on the Wealth Shortlist. This fund invests in larger companies than Marlborough UK Micro-Cap Growth, although it does have a bias towards smaller and medium-sized companies.

We continue to believe the Marlborough UK Micro-Cap Growth fund is one of the best in the sector. If the fund continues to meet an investor’s investment objectives and attitude to risk, we see no reason to take any action. The fund remains open for investment and available on our platform.

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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