Henderson Smaller Companies – an old dog producing new tricks


#1

Henderson Smaller Companies Investment Trust (LON:HSL) through different incarnations has endured through three different centuries, and during the te
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#2

Performance is pretty good eh, and that’s the kind of performance fee I don’t complain about where the normal fee is low. I just think it gives the fund manager something to aspire to.

We all like money, I know I do (just wish I could stop spending it!)


#3

This makes the case for smaller companies not being as dear as they were until recently pretty well but the market overall is still pretty dear IMHO.

It’s defo a well managed fund and good performance figure there too, but it’s the 16% discount that makes this really attractive to me right now, given its quality management.

I wouldn’t buy anything until after the Scottish referendum result next Thursday but if it’s a NO I might have a wee flutter here. Most of this year’s ISA is still sitting in cash.


#4

Just been comparing the performance and charges with the smaller companies trusts and to my surprise it’s coming out really well. It is the second biggest in the sector but it had completely slipped under my radar. I kind of half expected I’d be able to tear this recommendation to shreds but I can’t.

I think it’s because Harry Nimmo has a high profile unit trust and the pres bang on about him so much and Aberforth are just kind of unique.

It’s the top performing smaller companies trust over three years, near the top over five and whilst it was well beaten by Nimmo and Blackrock over 10 the returns are still near the op and very good.

I think Henderson just adopt too low a profile rather than getting out there and promoting their funds.


#5

If you can get a fund like this on a reasonable discount, which it is right now and just tuck it away in your ISA or pension and forget about it for a few years you’ll do pretty well. That’s the advice I was given when I started investing in my 20’s (just over a decade ago) and it’s done me well, even in the stock market crash in 2008.

Only thing to consider is is if the fund manager retires. It doesn’t say how old he is but he doesn’t look too old from that picture and as he’s been there for years he must like it so hopefully he’ll stay where he is.

Just one thing to consider is if you already own another smaller company fund, which I don’t at the minute, is you should check if it owns the same companies. I’ve been caught out before by buying two funds that were too similar in terms of what they actually owned.


#6

This was the first investment trust I ever bought and I love it, it’s been a great performer, and has always made good any losses if you hold on to it.

It doesn’t get as talked about as some of the other small company funds so nice to see it covered here.


#7

I started investing in HSL in October and November 2013 - yes, missed the boat on the 2011-13 small company gains because I was invested in Jupiter Merlin Growth - and it’s been a tough old year: I am today sitting on a very small loss.

HSL has however done comparatively well, because at least it’s held it’s value in price terms, while Nimmo’s SLS has tanked, and mid-cap specialists and Lowland have done poorly too. The only small company funds that have handled the spring 2014 slump well, in the sense of not losing money, are Aberforth and SEC.

What to do? I am going to stick with HSL because of its track record, but then Merlin Growth was supposed to be a good fund too. The “experts” always advise you to have a five-year time horizon, but the problem is, by the time you have waited five years and find the fund has still failed to perform, it’s too late, and you are the one left with an underperforming portfolio and are five years nearer towards retirement!


#8

Ouch! Sorry about that @Matchmade but hang on in there and you should be okay.

I’ve read positive commentary about the Jupiter Merlin range too, my issue which them is the charges are so high, as they tend to be with Multi-managers.

The only cheap multi-manager I know of is Witan investment trust at only 1%.

 


#9

To be honest you may be falling in to the trap that many small investors fall in to @Matchmade - over trading and following the herd.

HSL is a well managed fund that I am sure will do well in the long run. It looks like you followed the herd and invested at the top. You kind of implied you didn’t want to wait five years like the ‘experts’ say because then it may be too late, but that is exactly what you should be doing.

Own a basket of different funds and hold them for the long term.

Maybe you should do the investor clinic they have on here, or on one of the other bulletin boards like Moneysavingexpert (though the one on here is better), to get feedback on what you own.

You need patience as an investor and as long as you own a decent basket of different funds you should be okay.

The Jupiter Merlin range are good funds but you’re measuring them over too short a time span. It is true it is more expensive but so are all multi-manager funds except for Witan.

Best of British to you though mate.


#10

I have M&G Smaller Companies, which is a unit trust not an investment trust and the performance hasn’t been that great. I’m just wondering if I should switch it in to this instead?

I am quite new to investment trusts, I don’t actually own any yet, but I have been trying to learn more about them, I’ve been reading about them on here for the past couple of months.

I’m thinking that the discount is quite wide, and I want to hold them for something like 3, 4 or more years.

I work for myself and use my ISA as my pension savings.


#11

Yes this fund is a good option I think @bluesky. I like Standard Life Smaller companies too, but with the discount being so wide here I think I would go for the Henderson fund if it was my decision.