SMALL-CAP FUNDS ANALYSIS: Coronation Smaller Companies Fund
The fund is run by Alistair Lea, who was a manager of the Nedgroup Entrepreneur Fund about 15 years ago before moving to Coronation. He now shares responsibility with Siphamandla Shozi.The fund of R168m seems to be marginal in the R600bn-plus managed by Coronation Fund Managers, but it feeds a substantial number of ideas into the investment process.The fund has not performed well against the combined mid and small cap index, but this is not a good proxy for the true smaller companies universe. It has historically invested predominantly in industrial shares, and the recent uptick in resource shares (many of which were only recently relegated from the Top 40) has skewed the index.Lea has played resources via Implats, Northam and Exxaro. Resources accounted for about 8% of the fund. But he says the preference is for defensive quality shares.He says, for example, he is considering increasing the holding in Truworths — even though the sentiment about it is awful, as it is down a further ...
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