Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Miton UK MicroCap. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
A new version of this profile is available. View Latest
Overview

Miton UK Microcap (MINI) has been managed by veteran UK Small Cap equities manager Gervais Williams, alongside Martin Turner, since the trust was launched in 2015. The trust invests in a portfolio of UK equities with a clear focus on micro-cap companies, typically AIM-listed stocks with a market capitalization of below £150 million.

As discussed in Portfolio, the managers believe that we are entering an inflection point where the economic trends, which have led to the rise of globalisation and the dominant position of large caps over multiple decades, are in reversal. They expect this to provide opportunities for UK micro-caps as domestic markets benefit from the reshoring of businesses and supply chain inflationary pressures. Gervais and Martin focus on identifying relatively undervalued companies that demonstrate the ability to generate surplus cash flow through their operations leading to near-term capital growth. The portfolio is well-diversified across sectors and businesses to minimise the impact of the stock-specific risks that are prevalent within the micro-cap sector.

As discussed in Performance, MINI has outperformed the broader UK equity market and its comparator indices since its inception on 01/05/2015 to 07/09/2022. Strong returns were made relative to the peer group and benchmark in the aftermath of the coronavirus pandemic, through the success of the underlying strategy and the highly profitable gains from a FTSE 100 put option. However, over the short-term, MINI has underperformed, leading the trust to trade at a significant Discount of 8.0%, as at 07/09/2022. This is wider than the trust’s five-year average of 6.5%. The board offers an annual redemption facility which limits the potential impact of the discount by providing shareholders with the opportunity to exit their position at, or close to, NAV.

Analyst's View

In our view, MINI has much to offer the long-term investor. Gervais and Martin’s contrarian economic views lead, inevitably, to a Portfolio that will offer diversification to many investor portfolios, and a returns’ profile less correlated with the growth strategies that have performed well in recent years. However, as discussed in Performance, the conviction the managers have in the reversal of multi-decade-long trends which includes a prolonged low interest rate environment and the expansion of cheap credit, may lead to periods of underperformance if this thesis takes longer than expected to materialise. This is reflected in returns over the past 12 months.

The inherent volatility associated with the micro-cap sector makes the trust particularly sensitive to liquidity conditions in the market. However, the managers focus on selecting companies with low levels of debt and high levels of imminent cash generation, which along with the limited use of Gearing, may dampen the risk associated with the asset class during a period of prevailing market uncertainty. Additionally, whilst the re-introduction of the FTSE 100 Put option hasn’t paid off yet as it did during the pandemic setback, for us the differential in returns between large caps and micro caps underlines the scale of the trust’s recovery potential. The current Discount may provide a good entry opportunity, especially when considering the annual redemption facility which provides investors with the potential for limited discount volatility.

Bull

  • Attractive discount relative to historical average
  • Use of options may provide something of a hedge against adverse movements in the UK equity market
  • Diversified portfolio providing a returns profile less correlated to global equity markets

Bear

  • Strict mandate can lead to higher-than-average turnover, restricting the ability to benefit from long-term company returns
  • Although there has been a decrease in costs, the OCF of 1.41% remains high compared to peers
  • Heightened volatility and illiquidity of underlying holdings versus large cap peers and recent underperformance challenges the underlying thesis
Continue to Portfolio

Fund History

14 Jun 2024 Three ‘chiers’ for Macron
Whatever the outcome of the French president's gamble, turgid politics in Europe have far-reaching implications for investors…
18 Jun 2024 Miton UK MicroCap
Gervais Williams
Join this webinar as part of our week-long June online series 'Small caps - a lost decade' hosted by the team at Kepler Trust Intelligence...
calendar Register now
29 May 2024 It’s a small world after all
A recent rally in smaller companies could be the start of a long-term recovery…
07 May 2024 Thomas McMahon speaks on the Money Makers podcast
Thomas McMahon, Head of Investment Companies Research, appears on the Money Makers podcast to discuss three current themes in the investment trust sector: BCPT and commercial property, ASIT and split-level trusts, and the UK micro-cap sector...
10 Apr 2024 Micro-managing
What opportunities exist in the smallest part of the UK market?
16 Feb 2024 Fund Analysis
MINI’s managers believe the prospects for the strategy are the best they have been for 30 years…
14 Dec 2023 Results analysis: Miton UK MicroCap
MINI’s managers argue there is option-like upside in their micro-cap portfolio…
01 Nov 2023 Back to basics
Higher rates mean re-visiting portfolio construction...
24 Aug 2023 Fund Analysis
MINI’s managers aim to exploit extreme value in UK micro-caps…
11 Jul 2023 Results analysis: Miton UK MicroCap
MINI’s portfolio of micro-caps is trading on deeply discounted valuations…
06 Apr 2023 Fund Analysis
MINI’s portfolio is unusually cheap…
15 Dec 2022 Results analysis: Miton UK MicroCap
MINI’s unique investment process may uncover some good value in an otherwise uncertain environment…
16 Nov 2022 Bottom fishing
What can history tell investors about calling the bottom of a market?
11 Nov 2022 Called it
Some managers predicted we’d end up with the chaos we have today – but will they still perform well?
28 Sep 2022 Mind the gap
While chaos reigns in the short-term for markets, some investors see a growing disconnect between prices and reality...
28 Sep 2022 Slides and Audio: Miton UK MicroCap
Download the presentation and listen to the audio from our 'Growth at an unreasonable price' event from 23 September...
15 Sep 2022 Fund Analysis
MINI’s share price discount could offer a long-term entry opportunity…
31 Aug 2022 Growth at an unreasonable price
Growth has taken a beating as inflation fears have soared, but the tide may be turning and we have six speakers at our next event ready to tell us why…
10 Aug 2022 Get ‘em while they’re hot
Wide discounts in the UK Smaller Companies sector may present long term investors with good entry opportunities…
20 Jul 2022 Results analysis: Miton UK MicroCap
MINI’s share price discount could offer a good long-term entry opportunity…
17 May 2022 Podcast: How small caps will benefit from deglobalisation
Kepler's David Kimberley meets small cap veteran Gervais Williams for our first ever podcast...
16 Feb 2022 Perfectly formed
Our research suggests that investment trusts really are a better way to gain exposure to smaller companies…
30 Dec 2021 Great expectations
As the last of the mince pies wilts in the fridge, topped with a generous helping of stilton, the Kepler Trust Intelligence team stick a finger in the air and point toward their top picks for the year ahead…
30 Dec 2021 Fund Analysis
Specialising in the very smallest UK listed companies, MINI can provide a differentiated source of growth…
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
29 Sep 2021 Slings and arrows
Our analysts argue over whether it’s better to take arms against volatility in a portfolio, or to simply suffer it…
11 Aug 2021 In at the deep end
Does seeking out wider-than-usual discounts help investors systematically outperform in the UK trust space?
30 Jun 2021 Inflation – a real threat or hot air?
Two of our analysts ask whether recent high inflation numbers indicate something long-lasting and troubling is happening…
05 May 2021 Vive la revolution
For thirty years quality has had a structural tailwind; but revolt is in the air and value is on the barricades…
07 Apr 2021 Fund Analysis
After an exceptional 2020, MINI may yet have further to go…
24 Mar 2021 Shoot to Thrill: ISA targets for long term growth
We all intend to invest for the long-term but can often be distracted by the news...
10 Feb 2021 Eye of the Pfizer
Mining shares have rallied in recent months. With further potential, what impact could this have on the relative returns of active UK Small cap strategies...
14 Oct 2020 Fund Analysis
MINI is the strongest performing UK Smaller companies trust in 2020…
06 May 2020 The fight in the dog
We look at the characteristics which have separated the winners from the losers among small-cap trusts in the current crisis, with some surprising results...
30 Apr 2020 Talking Trusts - Gervais Williams, Miton UK MicroCap
Earlier this month, we hosted a webinar and live Q&A with Gervais Williams - watch the video and hear the audio here...
16 Apr 2020 Sea-change
Join smaller companies specialist Gervais Williams for a live Q&A to find out why, in the face of collapsing markets, small caps are in a uniquely strong position to perform...
02 Oct 2019 Fund Analysis
Based around a clear macroeconomic view, MINI offers investors exposure to some of the most exciting opportunities within the UK…
11 Sep 2019 Nanny knows best: how regulation is influencing returns
New research suggests disruption is threatened by increased regulation, with clear consequences for investment strategists...
04 Jul 2019 An industry icon
Stalwart of the investment trust sector Gervais Williams explains how a three decade history with trusts has informed his thinking...
19 Feb 2019 Fund Analysis
Launched in 2015 in anticipation of a post-globalisation pushback, Miton UK MicroCap invests in the smallest UK listed companies...
05 Nov 2018 Do politics matter?
With the pivotal US mid-terms looming, politics are front of mind for many investors - but should they be?
12 Sep 2018 Fake news...
Small cap funds, despite their reputation to the contrary, are less volatile and have delivered better risk adjusted returns than their large cap peers...
11 Sep 2018 Fund Analysis
Run by Gervais Williams and Martin Turner, Miton UK Micro Cap is a £102m investment trust that invests in the smallest companies in the UK...
19 Jun 2018 Pretty little things
Many smaller companies managers have been shifting into micro caps in 2018, should investors be following suit?
25 Oct 2017 Patience is a virtue…
We analyse the outperformance of UK small-caps and why it has been so important to take a long-term view...
13 Sep 2017 Big Issue(rs)
We highlight the UK equity trusts that have issued and bought back the most shares over the course of 2017 so far and how these actions have affected shareholders...
12 Sep 2017 Fund Analysis
A UK equity trust run by a highly-experienced team that invests in stocks with market capitalisations of less than £150m...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.