Wealth 50 Update: Marlborough Nano-Cap Growth
Jonathon Curtis | Mon 16 March 2020
The links in this article will take you to Hargreaves Lansdown’s main website for more information. Please be aware that if you wish to join any of the benefits in your company Plan you must return to this website to apply.
We have taken the decision to remove the Marlborough Nano-Cap Growth fund from the Wealth 50. We continue to have high conviction in managers Giles Hargreave and Guy Feld, and their ability to outperform in the future. But we want to keep the fund 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. It is important to note that this decision has not been impacted by recent stock market movement.
Long-term investors in this fund have been rewarded for backing one of the best small-cap teams around. Giles Hargreave is one of the most experienced investors in UK smaller companies, and in our view he's also one of the best. We positively rate Hargreave’s co-manager on Marlborough Nano-Cap Growth, Guy Feld, too. Smaller companies are more risky 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 50 (formerly the Wealth 150) in November 2014, the managers have delivered strong performance for investors. The fund has returned 74.8%* versus the FTSE Small Cap (excluding investment trusts) index’s 37.5% gain. Please remember past performance is not a guide to future returns.
| Annual percentage growth | |||||
|---|---|---|---|---|---|
| Feb 15 -
Feb 16 |
Feb 16 -
Feb 17 |
Feb 17 -
Feb 18 |
Feb 18 -
Feb 19 |
Feb 19 -
Feb 20 |
|
| Marlborough Nano-Cap Growth | 4.3% | 28.8% | 19.6% | 5.8% | 3.7% |
| FTSE Small Cap ex investment trusts | 1.6% | 21.2% | 7.9% | -5.6% | 2.6% |
Past performance is not a guide to the future. Source: Lipper IM to 29/02/2020.
Marlborough Nano-Cap Growth performance since Wealth 150 inclusion
Past performance is not a guide to the future. Source: Lipper IM* to 29/02/2020.
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 financial services, telecoms, consumer and mining. 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 are you removing the fund from the Wealth 50?
This fund invests in some of the very smallest companies in the UK stock market. 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 50 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 UK Micro-Cap and Marlborough Multi Cap Income funds remain on the Wealth 50 list. These funds invest in larger companies than Nano-Cap Growth, although they do have a bias towards smaller companies.
We continue to believe the Marlborough Nano-Cap Growth fund is one of the best in the sector.
If the fund continues to meet your investment objectives we see no reason to take any action. The fund remains open for investment and available on our platform.