With inflation normalising, I’ve been taking another look at my portfolio and considering which of my holdings could rebound in style. And there’s one from the that I’ve been thinking about a lot. Great start ( ) was launched back in October 2018 and immediately attracted a lot of investors’ money, including my own.
This initial popularity propelled it into the UK market’s second tier where it has stayed ever since. Drawing on the same strategy at its big brother — Terry Smith’s fund — the trust makes a point of trying to buy quality companies at a good price and then sticking with them like glue. Up until the beginning of 2022, this paid off handsomely.
The trust vastly outperformed its benchmark, helped by the market boom in the aftermath of the pandemic. Going cheap Since then, however, things haven’t been so stellar. Actually, that’s putting it kindly.
From a peak of just over 2,000p, the share price tumbled by nearly half. Roughly two years later and sentiment has improved, albeit not by much. To some extent, I sympathise with manager Simon Barnard on this.
Small- and mid-cap — the sort that Smithson looks to invest in — have been shunned thanks to their general reliance on debt to bring their growth plans to fruition. That’s not ideal when interest rates are high. This has left the trust trading at a discount to its net asset value.
As of 8 August, this stood at just under 12%. But for how much longer will this be the case? Rate cut incoming? W.