Stocks in Focus: Herald Investment Trust

This week Jason Butler of NW Brown Wealth Management looks at Herald Investment Trust, a UK-based collective fund that invests primarily in UK and North American mid to small cap companies within the technology, media and telecoms (TMT) sectors.


The company has just reported its full year results for the year ended 31 December 2019. It announced an increase in share price of 38% and growth of 28% in its net asset value per share compared to the year before. Over the same period, comparable benchmarks such as the Numis Smaller Companies Index and Russell 2000 Small Cap Technology Index saw their values increase by 19% and 29% respectively.

Katie Potts and her team have been running the fund since it began in 1994, and they have a proven track record of good performance on the companies and the stock universe they invest in. Herald has more than doubled its shareholders’ money in the last five years by investing in next generation technology companies across the world with the most recent results pointing to strong performance across all their regional portfolios. Although valuations are not as attractive as they have been in the past, the fund’s management team continues to see high levels of corporate activity in the small-cap sector, which typically provides more exciting growth opportunities than the wider market. Looking ahead, however, they warned that the technology sector will be affected if the coronavirus continues to disrupt manufacturing in China.

It can be difficult for long term investors to identify small companies with good prospects, especially in such a fast paced and rapidly evolving sector as technology. This is where the use of collective investment vehicles may be a good solution for diversified exposure to this part of the market.

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