As for the global small-cap trust sector, it’s a bit of mixed bag to be honest.

Both Edinburgh and Herald have that strong tech focus and I would tend to think of them as tech trusts first and small-cap trusts second. I think they’re likely to be most volatile of the bunch, as I believe they have been in the past.

Herald is 50% UK, which is pretty unusual for a trust classified as global and there is that question mark over how long Katie Potts will continue as the lead manager.

Succession is probably even more of an issue for North Atlantic Smaller Companies with Chris Mills now being 68 (I think) and fairly scant details as to what the succession plan is (as far as I know anyway). And I think it has even more in the UK, 70%, than Herald does.

And the BMO trust has struggled for a long time now. It seems to lack a clear identity to me, although I haven’t looked at it closely.

Smithson also has issues you could say, with its lack of a track record. I like the Fundsmith style, though, so I’m happy to keep holding it alongside my stake in Fundsmith Equity.

Of course, there are plenty more small-cap trusts that specialise on a regional basis, with the UK sector particularly well represented but plenty of choice in Asia, Japan, Europe, and North America. So, if you had strong views on any particular region, picking 2 or 3 trusts across these sectors could be an alternative way to go.

That market cap / fund size rule seems like a good one – certainly a lot simpler than my example.

Interesting point about the rejuggling Barnard did. Smithson seemed to recover from the March 2020 lows much more strongly than Fundsmith Equity did and that could be the reason why.

Yep, one day we might even see a Smithgrandson!

I didn’t know the detail about Barnard being so invested in it – really useful to know. It does help.

It is very early days as you say, given Barnard’s relative unknown qualities, but I am comforted that Barnard seems to be comfortable with the fairly defined Fundsmith playbook.

What I found interesting was how he handled the pandemic. It looked like he managed to do a good job of rebalancing i.e. selling the healthcare when it was consensus, and recycling it into the more beaten-up sectors. While I think this is possibly against the ‘Do Nothing’ mantra, it seems like a pretty positive thing to be doing.

On the other hand, I don’t have a sense of his skill at buying things at a good price – as you say it doesn’t seem an especially obvious time to be buying Rollins. Similarly with Fevertree, it went down a fair bit after they started buying – in contrast Lindsell Train went into Fevertree pretty much right at the bottom – I think their buying discipline is underrated. Hopefully if the companies compound it won’t matter so much in the long-run, but I hope he can do this better going forward. Terry Smith/Julian Robins also seem quite adept at this – they did well buying Facebook when it was out of fashion, and in particular did a great job buying Novo Nordisk when it dived.

I also think that it can be seen as a ‘stealth’ ESG fund – a lot of the holdings pop up in ‘ethical’ funds I look at. Perhaps this is more likely with a younger manager, but I think it’s good – not just for ‘doing the right thing’ but because I think good companies should do better over the long term.

Going back to your original point about the AUM – I tend to go by the rule of thumb that a fund shouldn’t invest in any company that has a smaller market cap than the fund. On that basis I think Smithson is fine. In addition, I think that as these quality mid-caps grow, it will be reasonable for them to invest in bigger firms. Maybe one day they’ll need a new fund for smaller firms again!

(To try and contextualise this, look at the size of some of the classic investment trusts in the 90s!).

I’m at my desired weighting now I think, so hope it recovers from its wobbly start to the year. Their style has possibly been affected by the recent US yield rises.

(sorry, this ended up longer than I intended it to…).