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UK All Companies

UK All Companies sector

We believe this sector is blessed with a number of skilled and high-quality fund managers.

Dominic Rowles - Investment Analyst
29 November 2018

A fund investing in UK shares is often the first port of call for UK-based investors.

And for good reason. The UK stock market is home to many world-class companies. From international giants to a diverse array of smaller businesses. It’s a rich hunting ground for fund managers.

UK All Companies funds aim to grow the value of investors’ money over the long term, although each will go about this in different ways. Some focus on larger companies in the FTSE 100 Index, others invest in higher-risk smaller or medium-sized companies, and some have the flexibility to invest in companies of any size.

Similarly, some fund managers are more constrained than others. Some invest in a similar way to the broader UK stock market, so returns don’t vary significantly. Others have more freedom and take more risks – they may invest in a smaller number of shares, sectors, or types of business, for example. This gives them a greater chance of performing better than the market, though the reverse is also true.

Our view

The UK is currently one of the world’s most unloved stock markets. Uncertainty caused by Brexit and political turmoil means many people are cautious in their outlook.

We think many companies have the ability to survive economic and political issues. Our stock market is truly diverse, with many companies making money both overseas and on home soil. Not only that, the UK is home to some exceptional fund managers with great track records of adding value for investors.

The decision of which managers to invest with can be difficult. We’ve scoured the market to find those we think have the greatest potential to excel over the long term and our favourites feature on the Wealth 150. Our history of selecting UK funds has been very successful so far.

Investors who’d prefer to access a number of funds in a single convenient investment may wish to consider the HL Multi-Manager UK Growth Fund. It combines what we think are the best managers from across the UK All Companies, UK Equity Income and UK Smaller Companies sectors. The fund benefits from our in-house research and we think it could make a great core UK growth fund. We feel the additional costs associated with running a multi-manager fund are justified by the benefits of this approach.

The HL Multi-Manager funds are managed by our sister company HL Fund Managers.

View HL Multi-Manager UK Growth Fund Key Investor Information

Investment notes

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.

Our favourite funds in this sector

First-class performance potential and low management charges

View the Wealth 150

The UK stock market fell 1.5% over the past year. Investors faced a cocktail of concerns ranging from Brexit negotiations, elections across Europe and Donald Trump’s tussle with China over trade.

The shares of UK companies of all sizes lost money. But large companies didn’t fall as much as small and medium-sized businesses. Bigger businesses tend to hold up better in times of uncertainty. Their scale means they can sell their products and services overseas and they aren’t as reliant on the UK economy as some of their smaller peers. This benefited funds with more invested in larger firms, although past performance isn’t a guide to the future.

Annual percentage growth
Oct 13 -
Oct 14
Oct 14 -
Oct 15
Oct 15 -
Oct 16
Oct 16 -
Oct 17
Oct 17 -
Oct 18
FTSE 100 0.7% 0.8% 13.7% 12.1% -0.9%
FTSE 250 2.8% 13.3% 5.3% 18.5% -4.0%
FTSE Small Cap 1.7% 9.0% 11.3% 20.6% -3.8%

Past performance is not a guide to future returns. Source: Lipper IM to 31/10/2018.

The oil & gas industry did well after a number of years of weaker performance. It was boosted by a rising oil price. Investors also favoured companies in the health care and mining sectors. But technology and telecoms companies performed poorly.

We think it’s sensible to invest in companies of all sizes across a number of industries. This increases diversification and reduces the risk of being fully invested in a poorly performing area.

Investment notes

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.

Five year performance

  • IA UK All-Companies sector

    +29.2%

  • FTSE All Share

    +30.5%

Source: Lipper IM to 31/10/2018. Please remember past performance is not a guide to future returns.

Our favourite funds in the sector

We regularly review all the main investment sectors. Here we provide comments on a selection of funds in the UK All Companies sector. They’re provided for your interest but are not a guide to how you should invest. If you’re unsure if an investment is right for you, seek personal advice. Comments are correct as at 31 October 2018. Remember all investments can fall as well as rise in value so you could get back less than you invest. Past performance isn’t a guide to the future.

To view a full list of our favourite funds within the sector, visit the Wealth 150. There is a tiered charge to hold funds with HL. It is a maximum of 0.45% p.a. - view our charges.

Other funds in the sector

Here we look at some other funds of interest following our most recent sector review. Please note the review period may be over a short time period and past performance is not a guide to future returns.

Source for performance figures: Financial Express.

Nick Train brings investing back to basics. He looks for great companies and holds them for the long term. They tend to have a unique position in their market that competitors find hard to replicate.

Nick Train tries to invest in companies with reliable earnings and strong long-term growth potential. His fund is currently focused on companies in the consumer goods sector. Unilever and Diageo are some of the fund’s biggest investments. They own hundreds of brands between them, which they sell around the world.

This type of company has been popular with investors over the past few years, although their popularity has waned in recent months.

We think Nick Train is one of the most talented investors in UK companies and his fund should perform well over the long term, although there are no guarantees. He has the flexibility to invest in higher-risk smaller companies and invests in relatively few companies. Both of these factors add risk.

The fund holds shares in Hargreaves Lansdown Plc.

Tom Dobell looks for companies that have fallen out of favour with investors but where he thinks there is scope for a change in fortunes. He invests in companies of all sizes, including higher-risk smaller companies.

The fund didn’t perform as well as the broader UK stock market over the past year. Periods of underperformance should be expected with recovery-style investing. Companies going through change can stay out of favour for some time. But we have faith in the manager to identify those with good prospects over the long run. We also remain encouraged the manager hasn’t strayed from his tried-and-tested investment approach. This fund could be a good way to diversify a portfolio invested for growth.

This fund is managed by a team of four. Each has a set of skills that complements the other team members. They look for strong businesses that have been overlooked and undervalued by other investors.

The fund didn’t perform as well as the broader UK stock market over the past year. Investors focused on companies with more reliable earnings and growth prospects. The fund hasn’t invested much in these companies because the managers think their shares are expensive when compared to their growth prospects. Investments in gold miners also performed poorly because of a falling gold price.

The contrarian approach used by the managers, combined with a focus on higher-risk small and medium-sized companies, makes it different to many of its peers. We think the fund’s managed by a strong team with the potential to deliver good returns over the long term.

The fund aims to track the performance of the FTSE All-Share; a broad index of UK companies.

The fund invests in around 650 large, medium-sized, and higher-risk smaller companies based across the UK. Since launch it’s tracked its index tightly and efficiently.

The managers try to find opportunities that have been missed by other investors. They can use derivatives to ‘short’ investments to try and make money when share prices fall. And they tend to invest in a small number of companies. These factors add risk.

This fund hasn’t performed as well as the broader UK stock market since Ed Legget became lead manager in December 2015. He previously ran a UK portfolio at Standard Life where investment ideas were provided by all team members. Funds managed by Artemis tend to be more reliant on the input of lead managers and we don’t think Ed Legget has proved himself as a standalone fund manager yet. We want to see how he does with Artemis over a longer period of time before considering the fund for the Wealth 150.

Keith Ashworth-Lord looks for great companies he can invest in for the long term. He tends to focus on companies that are easy to understand, well managed and in a financially strong position. He also has the freedom to use derivatives which adds risk.

The fund has performed well since launch in March 2011. Our analysis suggests returns have been boosted by the manager’s ability to invest in outstanding companies and his focus on higher-risk small and medium-sized businesses.

The fund has a bias towards the industrials and consumer services sectors. Investments in this area include RWS Holdings, a company that offers assistance to people filing patents, and aviation business Dart Group.

The fund doesn’t feature on the Wealth 150. It has a significantly higher ongoing management charge than some similarly-managed funds that are currently on the list.

This fund holds shares in Hargreaves Lansdown plc.

Latest research updates

Standard Life UK Smaller Companies - backing the tortoise over the hare

Standard Life UK Smaller Companies - backing the tortoise over the hare

Thu 22 November 2018

Harry Nimmo invests in companies in good financial health that he thinks will grow. He prefers growth that’s steady rather than potentially rapid but erratic. Long term performance is excellent.

TM Sanditon UK – ready for a tougher environment

TM Sanditon UK – ready for a tougher environment

Fri 28 September 2018

Julie Dean thinks we’re coming to the end of the business cycle. We look at how she’s invested her fund to weather a potential storm.

Old Mutual UK Dynamic Equity - a great long-term record

Old Mutual UK Dynamic Equity - a great long-term record

Thu 30 August 2018

This fund is managed by one of the best teams in the industry. In this update, we look at how it’s performed over the long term and share the manager’s outlook.

Invesco Perpetual UK Equity Pension - more invested in UK-focused businesses

Invesco Perpetual UK Equity Pension - more invested in UK-focused businesses

Fri 10 August 2018

Mark Barnett thinks lots of strong UK companies are going overlooked by other investors. In this update, we reveal where he’s focusing his search and look at how the fund has performed in recent years.

Franklin UK Managers' Focus - a different way to invest in the UK

Franklin UK Managers' Focus - a different way to invest in the UK

Fri 20 July 2018

This fund brings together the best ideas of five specialist fund managers. In this update, we look at where they’re finding opportunities and share our view on the fund’s prospects.

Investment notes

Please note the research updates are not personal recommendations to trade. If you are unsure of the suitability of an investment for your circumstances please seek advice. Remember all investments can fall as well as rise in value so investors could get back less than they invest.

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