SMALL-CAP FUNDS ANALYSIS: Old Mutual Small Companies Fund
You can’t get more of a boutique than the Old Mutual small companies operation. It consists of one person — Warren Jervis. He does, however, feed off the Old Mutual Equities investment process. The fund is 74% mid cap, 25% small cap and his colleagues research fund stalwarts such as Discovery, RMI, Life Healthcare, Tsogo Sun, Tongaat Hulett, Massmart and Imperial. The fund has avoided resources. Jervis held some Lonmin, which sold at R27/share quite some time ago. He passed on Northam and is out of Assore after a profitable ride. Six financial shares make up almost 20% of the fund, including the two favourites in this sector — short-term insurer Santam and the JSE Ltd. It also holds RMI, which is now back in mid caps after a spell in the Top 40 as well as Discovery, now a large cap. The other two "financials" are really industrial holding companies. Reinet, now in the top 40, is seen as a way of getting into British American Tobacco at a discount. Zeder, which focuses on food and ag...
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