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Attractive opportunities in smaller company markets

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The smaller company markets’ inefficiency can provide attractive opportunities in a range of market conditions, claims the Old Mutual UK Select Smaller Companies Fund, which is continuing to find attractive investment opportunities. 

The fund is ranked in the top decile in the UK Smaller Companies sector over 1, 2, 3, 4 and 5 years. Over 5 years the fund has returned 298.9% compared with 193.6% from the Hoare Govett Smaller Companies ex IT Index and 172.5% from the median fund in the sector. The fund is rated AAA by Standard & Poor’s and OBSR and Daniel Nickols is rated AAA by Citywire.

Daniel Nickols, manager of OMAM, said: “Even during difficult market periods, investors in smaller companies can add value by exploiting market inefficiencies – by buying shares in under-priced companies and selling them when valuations become more realistic.  The key driver to performance is knowing more about companies than the market and that is achieved by conducting rigorous research.

“The sheer number of smaller companies on the market – over a thousand in the UK alone – means that there are resulting market and pricing inefficiencies that we can exploit due the lack of information about these companies.”

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