Selecting companies based on their individual attributes (this management style is known as taking a bottom-up approach), with a diversified portfolio of primarily smaller and micro-sized companies. The fund does not follow any particular market index. The focus is on genuine smaller companies which are often not well-known, are under-researched by investment analysts and where there is potential for the value of the company to be mispriced.

A lack of investment analyst coverage means that very little information is published about the company and its prospects, which means that its potential true value may not be fully understood and as such may not be reflected in the company’s share price.

The stock selection process uses a ‘traffic-light’ system to assess the criteria below before investing and to reassess stocks that are help in the portfolio:

• Are there prospects for rising turnover?
• Can margins be sustained?
• Does the management team make decisions the fund managers feel will build real intrinsic value?
• How much financial flexibility is there in the balance sheet?
• Are there low expectations in the share price?

• The value of investments may fluctuate which will cause fund prices to fall as well as rise and investors may not get back the original amount invested.
• Investment in the securities of smaller and/or medium sized companies can involve greater risk than may be associated with investment in larger, more established companies. The market for securities in smaller companies may be less liquid than securities in larger companies. This can mean that the Investment Manager may not always be able to buy and sell securities in smaller and/or medium size companies.
• The Fund does not use derivatives extensively, although it may use them in an attempt to reduce risk, reduce costs and to generate additional income. Investing in derivatives carries the risk of reduced liquidity, substantial loss and increased volatility in adverse market conditions. Derivatives may expose the Fund to credit risks of counterparties, who may not meet payment obligations. The use of derivatives may result in the fund being leveraged (where economic exposure and thus the potential for loss by the fund exceeds the amount it has invested) and in these market conditions the effect of leverage will magnify losses.
• This fund may experience high volatility due to the composition of the portfolio or the portfolio management techniques used.