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Shares shines the spotlight on the small-to-mid-sized funds that could become the major players of tomorrow

In the same way investors can make a mint by backing a mythical ‘10-bagger’ early doors, fund fanatics can make big gains by catching an investment trust on the way up, before it begins its rise through the market capitalisation ranks and potentially even joins the likes of Scottish Mortgage (SMT), 3i (III) or Pershing Square Holdings (PSH) in the FTSE 100.

We can never know with certitude which investment styles and trends will be in fashion years into the future, but we can mine data to decipher which modestly-sized investment trusts are delivering stellar performance today, and have a chance of motoring through the market cap ranks as a result.

To help narrow the search, Shares has crunched data using FE Fundinfo to find those investment trusts, valued at more than £200 million but less than £350 million, that have delivered the best total returns over the past three years.

Established trusts with track records and scale, these names are also nimble enough in terms of size to be able to invest in growth companies that can move the performance dial and (hopefully) propel their own market caps higher as demand for their shares grows.


According to FE Fundinfo, the best three-year performer by some stretch in this market cap band is the under-the-radar Oryx International Growth Fund (OIG).

Over this period, it has generated a terrific total return north of 130%, building on the outstanding long-run record under Christopher Mills and his team at Harwood Capital Management.

Oryx International Growth’s net asset value (NAV) per share increased by 86.6% to £16.42 in a testing year to March 2021, as its focus on only investing in companies with good prospects, active management and conservative balance sheets shepherded the trust through the Covid crisis.

NAV growth was driven by some standout price performances from quoted small caps including Renalytix (RENX:AIM), EKF Diagnostics (EKF:AIM), Sureserve (SUR:AIM) and MJ Gleeson (GLE), as well as a satisfactory result from the unquoted portfolio.

Relatively new additions to the portfolio include GYG (GYG:AIM), a microcap provider of maintenance services to superyachts, medical technology concern Tissue Regenix (TRX:AIM) and Wandisco (WAND:AIM), a business that moves data to and from the cloud and counts Microsoft and Amazon as two of its largest customers.


Hot on Oryx’s heels with a three-year total return of 87.5% is JPMorgan Russian Securities (JRS), which trades at a 13% NAV discount which might pique the interest of adventurous investors.

Managed by the experienced Oleg Biryulyov alongside Habib Saikaly, the fund’s bottom-up approach is focused on making long-term investments in best-in-class companies with robust corporate governance and strong balance sheets. These include Gazprom, a beneficiary of increased demand for gas in Europe and also Sberbank, which dominates the Russian banking sector and is expanding into non-financial technology.

In June, Numis Securities pointed out Russia as the cheapest major global equity market and wrote that: ‘As the world’s largest energy exporter, Russia is highly geared to the reopening and reflation trade. The economy is expected to return to growth this year, benefiting from rising commodity prices.’

The broker regards JPMorgan Russian Securities as ‘an attractive way to tap into the theme’ with the energy, materials and financials sectors dominating the portfolio.

Also flying high in the performance tables is another country specialist, Weiss Korea Opportunity Fund (WKOF:AIM), which has returned an impressive 68.4% over three years and a handsome 98.1% over five years.

Not only is Weiss Korea Opportunity the only UK-listed fund offering investors dedicated access to South Korean stocks, the £204 million cap also pursues a differentiated investment approach that seeks to profit from the valuation gap between non-voting Korean preference shares and the common shares issued by the same companies, with Hyundai Motor, LG Chem and LG Electronics among the top 10 positions.

Also meriting mention is a fellow Far East investor, the £331 million cap Fidelity Japan Trust (FJV), which has returned 167% and 68.3% on five and three year views respectively under the stewardship of Nicholas Price, who took on the management of the portfolio in September 2015.

On 12 August, Stifel explained that since Price was installed as manager, ‘the trust’s NAV total return has been more than double the returns of its TOPIX benchmark, making it the best performing Japanese All Cap trust under our coverage over one year, five years and since the manager’s appointment’.


Other trusts with sub-£350 million tags able to toast robust performance figures include Schroder UK Mid Cap Fund (SCP). This £266 million cap invests in the high-flying FTSE 250.

Up 67.5% on a total return basis over one year, the trust has generated a 55% total return over three years as it profits from the best opportunities in what managers Jean Roche and Andy Brough refer to as the ‘Heineken Index’, given the FTSE 250’s potential to ‘refresh’ portfolios in a way other parts of the market cannot. Top 10 holdings as at the end of July included fantasy miniatures maker Games Workshop (GAW), homewares leader Dunelm (DNLM) and ambitious media group Future (FUTR).


Other funds within this market cap bracket that have the potential to become much bigger include Montanaro UK Smaller Companies (MTU), up 66% and 130% over a three and five year timeframe. Seasoned investor Charles Montanaro, who has agreed to continue managing the trust for a least five more years. The trust boasts one of the lowest ongoing charges figures in the Association of Investment Companies’ UK Smaller Companies sector at 0.82%.

Investors should also follow the fortunes of Augmentum Fintech (AUGM), a £297 million cap which has delivered a three-year return of 62%. The UK’s only publicly listed investment company focused on the fintech sector, it offers exposure to a red hot theme and could become a far bigger trust over time, although this thematic excitement is reflected in the trust’s near-26% premium to NAV.

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