Abrdn UK Smaller Compani... Share Discussion Threads

[uk2day] 20/7/2015 22:37

nice rise today tiger hope you are still dripping!

[henryatkin] 02/9/2014 12:35

I've got my doubts. Nimo said this in his latest report:

"From the start of the Company's financial year until 6 March 2014, the market was happy to take on risk and in particular support high growth companies, with valuation a secondary consideration. In general, markets took the view that the smaller the stock, the better the performance. This is typical of a bull market: stocks exhibiting earnings and price momentum were favoured. All this was supported by a buoyant economic backdrop, especially in the UK, but also in the US. Indeed an unusually strong confluence of economic growth and recovery was evident all round the world including Japan, China and even continental Europe. This was a vintage period for smaller companies, with this part of the market up by 27% in the period to 6 March 2014.

Following that date and Fed Chair Yellen's comments, investors, including the increasingly influential multi-asset, global macro segment, moved to reduce risk by exiting small and mid sized companies. This was often achieved by indirect methods such as derivatives or selling exchange traded funds (ETFs). This, in turn, caused selling in the underlying holdings and prompted downwards share price pressure in particular on the smaller constituents of the FTSE 250 which also coincide with some of our larger holdings. At the same time the new issues market was unusually active, particularly with retail new issues. Fund managers who wish to participate in these new issues tend to sell previous winners, especially existing retail holdings. High growth stocks which did particularly well in the preceding period were sold due to being seen as high risk. The microcap segment, in which this Company is only a small participant, was exempt from this major rotation as there are no derivatives in this part of the market. Microcaps were not weighed down by new issues. Indeed, there were strong money flows into this sub-sector during the year."
...............................................................................

imho, at a coming of a correction or long period of consolidation high PER/high PEG growth stocks tend to sell off faster than income stocks. Smaller UK Funds are generally high PER/high PEG growth stocks which are the first to go risk-off. Hence year to date, SLS & BRSC are down 13% while SDV is only down 2%. Unit trusts low PER/low PEG, Slater Growth Fund & Marlborough Micro cap Fund have gained 12% & 6%, confirming Nimo's last two sentences.

[jamielein] 20/8/2014 08:57

Hopefully you're right. These went from trading at a premium to trading at a discount so the fall was exaggerated.

[henryatkin] 19/8/2014 15:18

Looks like the pull back is over. Weekly candles:

[simon gordon] 19/7/2014 08:37

What Investment - 18/7/14:

Shock for investors as Harry Nimmo's UK Smaller Companies fund named on 'Spot the Dog' list

Investors in Harry Nimmo's Standard Life Investments UK Smaller Companies fund, long a beacon for smaller companies investors, has been named on Bestinvest's 'Spot the Dog' list of funds to avoid.

Bestinvest compiles its list of 'dog' funds for investors to avoid by looking for funds that have underperformed the benchmark in each of the past three years, and by a cumulative 10 per cent over the entire three-year period.

Nimmo's fund has a sterling long-term track record, having delivered 738 per cent since 1997, compared to 371 per cent for the IMA UK Smaller Companies sector.

But the past three years have been more challenging. The fund is ranked 50th out of 51 funds in its peer group over that time period, and is the absolute worst fund in the sector over the past 12 months.

Jason Hollands, managing director at BestInvest, acknowledged the previous strong performance of the fund by commenting that he wouldn't be surprised if this was the only year in which it made the list of 'dog' funds.

However, he added that the size of the fund, now over £1 billion, would make it more difficult for Nimmo to repeat the spectacular outperformance that its investors have enjoyed in the past.

[henryatkin] 07/7/2014 09:57

Nimmo warns on liquidity in uk micro caps:

[henryatkin] 27/5/2014 07:19

URVNME...I've had no problems "trading" small cap etf's with tech analysis. Tight spreads and good volatility. SLS high PER is largely down to the higher quality momentum stocks that Harry Nimmo selects so it tends to have a higher PER in both bull and bear markets and is no more or less likely to be have a higher volatility than any of its competitors. In fact Sharescope shows SLS & BRSC have the lowest volatility of all those you list, so long term you get highest returns with lowest volatility.

[urvnme] 24/5/2014 11:54

Short term is irrelevant unless you are trading ETF's.
10 year period returns excluding dividends & costs:
AAS 480%
SLS 480%
BRSC 350%
SCP 290%
HSL 260%
ASL 160%
SDV 60%

PeterBill... ETF's are a bit like property companies where P/E is of little use for valuation. Here most investors look at NAV premium or discount which is why that is the figure the funds publish. If you look at a property company like GPOR for instance you'll find its on an adjusted P/E of 57 but the Net Asset Value is £1932m with a current Market Cap of £2193 which represents a 13% premium to NAV (quite toppy).
P/E is a historic market sentiment valuation put on a stock by individual investors but NAV is what is considered to be closer to the intrinsic value of the company or fund.

[envirovision] 17/5/2014 18:46

Jeez this owns a pile of in the sky stuff, bet holders here wish they had been in SDV instead.

[peterbill] 17/5/2014 08:15

I think SLS is still too expensive ... PE ratio of 63?, Divi yld of 1.3%, Cover 1.13, etc. ADVFN figures so may have to compare with Digital Look.

[henryatkin] 13/3/2014 09:27

Another high risk, high reward fund is Gervais Williams CF Miton UK smaller companies (CGLERS). It seems higher risk than SLS but is up 60% year to date compared to 30%.
I'm now looking at a basket of UK smaller company funds of SLS, BRSC, HSL, & CGLERS. Equally weighted they have a return of year on year +43.5%

[henryatkin] 02/3/2014 11:55

yep, HSL is doing very nicely of late, up 6% on the week. I don't know what's changed because on a ten year basis they underperformed SLS & BRSC. They seem to have their act together now though, so perhaps a new fund manger came in somewhere along the line.

[tiger20] 28/2/2014 16:58

Good day today henry but mt HSL smaller co. did even better today

[henryatkin] 28/2/2014 13:42

tiger... yes the report is a very good read. The Nunis Small Company Index follow a higher path than the SMX or SMXX so SLS are still trading well above the small cap index as a whole. Numis are reporting a 50% probability of their small company index going from 15800 to 25000 by the end of 2018 - that's approximately 60% potential rise over five years:
hxxp://www.numiscorp.com/content/3368/NSCI%20Press%20Release%2015%20January%202014_v4.pdf

[tiger20] 28/2/2014 07:57

Results out this morning-great over 5 to 10 years but last year slightly down against its benchmark-one of my core holdings.

Good reading and graphs on this site

Thanks

[henryatkin] 24/2/2014 08:26

STopps.... interesting what Nimmo says about cyclicals being riskier. HSL tend to invest more heavily in cyclicals such as house builders & plant hire in their top ten stocks. it has given them a higher return over recent years but they got far greater hammering in the credit crunch:

SLS BLUE, HSL GREY

[stopps] 22/2/2014 10:42

Henry re harry

[henryatkin] 22/2/2014 09:28

I wonder whether SLS's high valuation is holding it back relative to HSL & BRSC. It has lagged every year since 2009. SLS is red on the following chart:

[henryatkin] 21/2/2014 10:15

Valuation for Dec 31st portfolio: The top ten stocks average Adjusted PER 40.3 compares with the ten year average (PE10) of 22.6 for the same portfolio of stocks.
ASC & TEP distort the figure of 40.3 but the ten year averages seem a realistic reflection of how overvalued the markets currently are in the Smallcaps compared to the main FTSE100index which is close to its ten year average. None of the top ten stocks have a current rolling PER less than their PE10. Clearly the portfolio reflects the price investors are prepared to pay for quality growth/momentum companies but the danger of valuations almost 100% above their PE10 is that it could cause a high volatility retracement on the slightest bad news as was the case with DIA which has fallen 50% from its peak price.
EDIT. The top ten stocks average rolling P/E of 40 looks very expensive compared to HSL average P/E 14.6

[henryatkin] 16/2/2014 10:56

The main issue I have with smallcaps is their drawdown volatility in market corrections. That is especially true when their relative valuations are so high as they currently are. In the year 2011/12 SLS peaked and fell 20% compared to just 8% on UKX. In What Works On Wall Street, James O'Shaughnessy suggests a basket of smallcap growth stocks and main market high yield stocks to reduce total volatility and maintain risk adjusted returns. His reasoning is that high yield large Mcaps usually act as a defensive portfolio in market pull backs (or bear markets) for their total return qualities. UKX works well enough but a UK high yield large Mcap fund might work better. Probably better to scale in and out at a fixed percentage drawdown.

[trader2] 12/2/2014 11:52

Henry - have similar thoughts. Keep getting bitten by individual small caps - so wonder why bother. Stick to funds instead. Be nice to see some new highs to show that the uptrend continues.

[henryatkin] 12/2/2014 10:22

Five year comparison charts for BRSC (blue), SLS (red), SCP (green) & UKX (brown). It makes me wonder whether I should load more of my investments into a basket of these smallcap funds and trade just a very small number of exceptional potential high growth stocks. Its questionable after accounting for costs, time and research, whether running my own strategies and portfolio is worthwhile as all three funds comfortably outperform the smallcap index by around 100% over five year period giving an average compound interest in excess of 25%:

[henryatkin] 22/1/2014 14:40

www.whatinvestment.co.uk/financial-news/banking-and-savings/2451882/fidelityand39s-fund-supermarket-introduces-035-annual-fee-and-trumps-hargreaves-lansdown-with-and39no-additional-chargesand39-claim.thtml


Fidelity funds management have out done Hargreavea Lansdown by introducing a new charge of 0.35% with no extra's for buying, selling, transfers, closing out etc. on accounts up to £250,000.












Fidelity's fund supermarket introduces 0.35% annual fee and trumps Hargreaves Lansdown with 'no additional charges' claim
Will customers be the winners from a price war between fund supermarkets?




Fund supermarket Fidelity has announced that it will be introducing a 0.35 per cent service fee on all funds and shares held on its platform.

But Mark Till, head of personal investing at Fidelity, claimed that in contrast to competitors there would be 'no additional charges' to pay such as fees for transfers in or out, probate valuations or buying and selling funds.

The aim, said Till, was to make Fidelity's pricing 'as straightforward as we could'.

The 0.35 per cent fee applies on any holdings up to the value of £250,000. Once customers hold more than £250,000, they will be charged a lower fee of 0.2 per cent on all their holdings. Those who hold over £1 million will pay the 0.2 per cent fee only on the first £1 million of their holdings, and nothing on any excess.

'We've gone for a cap so our fees aren't forever rising. At £1 million we feel we've done all the work we can and earned the fees that are appropriate,' said Till.

The changes come into force from 9 February, but existing Fidelity customers will, said Till, be given a choice about whether to move to the new pricing structure or stick with the old one.

The news from Fidelity follows hot on the heels of an announcement last week from the company's main rival Hargreaves Lansdown of its new pricing structure.

Hargreaves Lansdown's headline service fee at 0.45 per cent is higher than Fidelity's, and there are additional charges for services such as probate valuations, which have attracted criticism from customers.

Hargreaves Lansdown claimed that the funds within its Wealth 150 list of recommended funds had an annual management fee of 'approximately 0.65 per cent'. Fidelity said today that the average annual management charge on funds in its Select List was '0.64 per cent'. However, Fidelity's figure includes passive tracker funds, which pull down the average.

Fidelity allows customers to trade shares on the Share Network brokerage platform, whose charges remain the same, with dealing costs of £9 per transaction. This also applies to investment trusts if they are held through Share Network.

However, for the five Fidelity investment trusts held on Fidelity's fund platform, the annual service fee will not be charged. They will count towards the £250,000 and £1 million thresholds for lower fees, though.

Till said that Fidelity will contact existing customers by letter, email and phone to talk to them about whether they are better to move 'some, all or none' of their money across to the new pricing structure. 'That way, we don't force any existing customers' charges to rise,' he added.

While Till acknowledged that other providers offer lower annual service fees than 0.35 per cent, he defended Fidelity's pricing.

'We're not an execution-only business, we're a guidance business. We're going to help you find the best investments.

'We have 350 analysts in 13 different countries that allow us to investigate the best investment opportunities wherever they happen to exist