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Jupiter UK Smaller Companies Fund

21 July 2021

3 minute read

Coffee shops in Central London have not always been a place for a mid-morning decaf grande caramel macchiato with almond milk and a sprinkle of cinnamon. They were once the places where modern day investing was born. Those merchants, traders, and explorers have been replaced with fund managers, and the smaller companies market is just as interesting today as it was back in the 17th century.

Who's it for? All investors

If you wanted to make your fortune from investing 300 years ago, it’s possible you would have been found in a coffee house somewhere near what is now the Royal Exchange in the City of London. In return for your investment in his venture, merchants, traders, or explorers would offer you a share of any profits they made from their expeditions overseas.

Despite the strong risk that you many never see the return of your capital, or the explorer himself ever again, the potential for making untold riches was tempting.

Smaller companies today

Professional investors today are thankfully far more considered in their decision-making. UK smaller companies fund managers are probably the natural successors to those 17th century speculators, and Dan Nickols is one of the most highly regarded, having been responsible for the Jupiter UK Smaller Companies Fund since 2004.

The manager, together with his team of analysts, looks to buy fast growing, smaller companies across a variety of different sectors and business types. They mainly own shares already trading on a UK stock market. But they will also invest in businesses that are privately owned but want to list on the stock market. These are traditionally known in the UK as a company flotation, or ‘Initial Public Offering’ (IPO).

Most of the 70-90 companies that the fund owns will not be IPOs, but will have been trading on the stock market for some years. And each of those companies will have a long-term business model, which the team at Jupiter will have analysed. Dan Nickols or one of his team will have already met its senior management, and have a view on why they want to own it.

New companies coming to market

When a new company decides to list on the stock market, or ‘go public’ they carry out as much work as they can to understand if that decision would be in the best interest of the fund and its investors. The Jupiter team is often consulted by these companies and their sponsoring banks before they are listed.

This allows the team to carry out a great deal of research on a company, to understand if they wish to invest or not. Other investors could do the same if they wished, but they may be too small and unable to spare the time and effort to do so. Investing in these new companies, to help them grow rapidly, is a process whose origins can be traced back to those in the coffee houses of the 1700s.

Higher risk?

Smaller companies funds can be seen as more risky investments than those which invest in larger shares. The companies themselves are normally less mature (i.e. have not been around for very long) and the shares can be harder to buy and sell. But smaller companies can potentially offer higher share price growth, which is why they may be worth considering in a diversified portfolio, by investors willing and able to invest for the long term.

In addition to the Jupiter UK Smaller Companies Fund, there are several more funds on the Barclays Funds List which invest in the UK market. Find out more information on these funds.

Correct at the time of publishing.

To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

Past performance of the fund and its manager are not a reliable indicator of their future performance.

We don’t offer personal investment advice so if you’re unsure you should seek that independently.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ.

Plan & Invest is a service which creates and manages a personalised Investment Plan just for you. Whether your long-term goal is your child’s university education, retirement or just building a nest egg, all you have to do is tell us a bit about yourself and then, if your application is successful and you’re ready to invest, let our experts select and manage your investments (minimum investment is £5000).

Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.

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