ABERFORTH SMALLER COMPANIES TRUST: Aiming for long term growth by investing in small UK firms
What does it do? The trust, which launched at the end of 1990, is the largest within the UK smaller companies sector.
It aims to grow savers’ initial investment over the long term, by investing in a selection of small UK companies listed on the stock market.
What does the manager invest in? Aberforth’s usual portfolio consists of 80 individual companies.
Some of the largest include rail operator First Group, specialist magazine owner Future, furniture retailer Dunelm and pub group Mitchells & Butlers.
What do experts like? Andrew Herberts, at financial group Thomas Miller, says Aberforth gives investors access to two factors which produce strong performance over the long term – smaller company size and value investing, where the manager picks stocks it thinks are undervalued and should improve.
Any downsides? Value investing has been out of favour in the recent past, Herberts notes, as the market has tended to swing towards so-called growth companies which are scaling up fast.
Aberforth’s share price has also slipped in February, although this could be good chance to buy in.