Moneyspider Articles

Does size really matter?

One of the investment questions you may ask yourself is whether it's best to go for funds, which invest in larger companies or those focusing on smaller faster growing companies. 

Smaller is sweeter?

The case for smaller company funds is that if your fund manager chooses the right smaller companies it is likely, over time, that it will outperform the average large company fund. And probably many times over. Who was it who said, "Elephants don't gallop"? 

For example, it's usually easier for a fund manager to get to grips with a smaller company and its business objectives. A smaller company is also more likely to be on the receiving end of a takeover bid which will improve its share value. Well run Smaller Companies Funds invest in a large number of such companies, thereby spreading any potential risk - which can arise for instance when a company is dependent on a single product or market. There's no doubt that small cap funds are where you do at least have a good chance, in part of your portfolio, of beating the index handsomely if you are in the right fund and the fund manager selects the right stocks. 

Bigger is better?

However, the advantage of big company funds is that you are more likely to know what many of the underlying companies actually do - for example BP or M&S. Also, some people feel more comfortable investing in funds, which own shares in companies whose names they know. 

But it's best to make a positive choice to invest in a share or a fund for sound business reasons, not simply because it's a name you may have heard of. And one of the best reasons for investing in big cap funds is that they do tend to be the first to respond when the market is surging ahead. 

But whatever funds you choose to invest in - big or small, UK or overseas - it's crucial that you select the right funds; and the very first thing to check is how your existing funds are performing.   

Moneyspider.com enables you to see at a glance how your ISAs, PEPs and Unit Trusts are performing; what they're worth; how they're rated and crucially how they compare with other funds. Something your Fund Manager will never tell you.

Unique performing rating

Moneyspider.com's highly sophisticated but easy to understand performance rating system covers 2,000+ Unit Trusts and OEICs (including ISAs and PEPs) available to UK investors. You must already have one or more of these funds to be eligible for the Moneyspider service which will then provide you with a personal online report and valuation, updated daily, showing how each of their funds has performed over 1, 3 and 5 years. Moneyspider.com also provides a comparison with other funds and each of your funds will receive the unique Moneyspider Rating ranging from A for 'Excellent' to E for 'Awful'!