A couple of weeks ago, Shares took a look at a handful of ‘under-the-radar’ stocks held by some of the most popular funds readers would be familiar with, such as Fundsmith (B41YBW7), JPMorgan Growth & Income (JGGI) and Fidelity Special Situations (B88V3X4).

In this feature, we are investigating ‘under-the-radar’ funds, little-known gems which in their own right could make a useful addition to any portfolio. We’ll be looking at how they invest, what’s in their portfolios and how they have managed to put up such impressive performance numbers in recent years.

 

IS BIGGER BETTER?

Investors tend to gravitate towards larger funds as they tend to have longer track records, greater liquidity and, often because of the economies of scale, lower charges, but that doesn’t always mean their performance is top-notch.

Smaller funds run less money, so managers can be nimbler and invest in stocks lower down the market scale ladder, giving them a much larger investment field in which to forage.

Larger funds, by contrast, are often unable to invest in smaller opportunities because they would be forced to either take an overly large stake in the company or establish a position which is too small to make a difference to the fund’s overall return, or ‘move the needle’ in fund manager-speak.

These contrasts mean smaller, more agile funds can outperform their larger cousins, sometimes over many years.

Take the Blue Whale Growth Fund (BD6PG78), for example. Launched in September 2017 with a £25 million cheque from Peter Hargreaves, it invests in high-quality businesses with long-run growth scope, at attractive prices.

Blue Whale eschews research from third party brokers, instead relying on its own in-house team of analysts to come up with great investment opportunities, then robustly tracking them in detail once they make it into the concentrated portfolio.

With typically with between 25 and 35 stocks, current holdings include Nvidia (NVDA:NSASDAQ), Visa (V:NYSE) and Paddy Power-owner Flutter Entertainment (FLTR), plus lesser-known ones like chip equipment maker Lam Research (LRCX:NASDAQ), German biotech kit designer Sartorius (SRT:ETR) and Danaher (DHR:NYSE), the US lifesciences powerhouse.

Performance has been impressive, returning more than 180% since inception (to 3 July 2025), beating its Investment Association Global Sector benchmark every year bar 2022 and often by a wide margin. That is why, today, Blue Whale Growth manages more than £1.3 billion of investor funds.

Matching that performance is a high bar, but we believe that these (largely) sub-£100 million funds have the potential to do so.

 

IFSL Meon Adaptive Growth Fund (BMQ8V53)

Price: 150p

Ongoing charge 0.82%

Proving that bigger isn’t always better when it comes to global portfolios is Meon Adaptive Growth (BMQ8V53), a £48 million minnow punching above its weight.

Over three years, the Robert Hale-managed fund has delivered roughly double the cumulative return of the IA Global sector through a systematic approach which is delivering for investors.

The fund is up 62.1% versus 31.8% for the sector, ranked first-quartile over three years and one year, and boasts a five-star rating from Morningstar.

Hale uses computer modelling to assess numerous financial measures of companies and can also invest in ETFs (exchange traded funds) to bring exposure to shares, bonds and commodities, but he reserves the right to use his judgement to override the output of the computer model.

While the fund is skewed towards UK, European and US-listed large caps, it doesn’t currently hold any ‘Magnificent Seven’ names.

Notable successes from positions closed over the past 12 months include Royal Caribbean Cruises (RCL:NYSE) and Leonardo (LDO:BIT), while winners within the current top 10 include ACS (ACS:BME) and Kongsberg Gruppen (KOG:OSE).

‘Perhaps one of the greatest advantages of a systematic approach to the management of a global equity portfolio is that you don’t get hung-up on style,’ says Hale.

‘Many managers set out their stall with a bias toward value, whereas others are more adept at a growth approach. Convincing a value stalwart to jump ship to growth and vice versa doesn’t always end well. The market is currently rather split upon which side of the divide to invest.’

With interest rates apparently heading lower, ‘growth could be where to head, but bond yields are remaining stubbornly high and therefore value could still prevail’, explains Hale.

‘And so it is that we at Meon rejoice in the fact that our style-agnostic, systematic approach, which ignores the confusing noise from around the globe, has navigated a successful path, providing worthwhile outperformance, with lower levels of volatility and a globally diversified portfolio that has adapted along the way.’ [JC]

Ninety One Global Special Situations (B29KP10)

Price: 496p

Ongoing charge 0.82%

The Ninety One Global Special Situations fund (B29KP10) has delivered solid returns to investors over the past 10, five and three years on an annualised basis, outperforming its benchmark, the MSCI All-Countries World index.

The fund, managed by Alessandro Dicorrado, aims to provide capital growth and income to investors over at least five years by investing in companies from around the world which he believes are undervalued by the market.

‘We employ a value strategy, focusing on uncertainty rather than solely low multiples when identifying companies to invest in,’ explains the manager.

‘The recent markets’ turmoil after the US trade tariff news in April created opportunities for us to buy companies with a cheap valuation. We are particularly interested in how markets overreact to events as this presents buying opportunities.’

To identify potential investments, the fund employs a quantitative screening tool to analyse companies undergoing special situations. These can be defined as company going through a turnaround, spin-off, post-bankruptcy or re-capitalisation.

Dicorrado adds: ‘The fund focuses on the likelihood of being right eventually, rather than precisely timing the bottom.’

There are several notable names in the fund’s top 10 holdings, including aircraft engine maker Rolls Royce (RR.), Facebook owner Meta Platforms (META:NASDAQ) and airline and holiday packages provider Jet2 (JET:AIM).

‘Rolls Royce and Meta have performed well for the fund,’ says Dicorrado and ‘may well be trimmed or sold [in the future].’

In terms of new holdings, the fund is looking to Brazil’s investment management company XP Inc (XP:NASDAQ) as a potential recovery story, and warship builder Huntington Ingalls (HII:NYSE), which Dicorrado believes is an undervalued stock.

Surveying the current market backdrop, Dicorrado thinks uncertainty will remain elevated: ‘Geopolitical tensions, shifting trade dynamics, and persistently high borrowing costs demand caution. In this environment, a passive approach won’t cut it. An active approach is essential-targeting alpha through quality and value, two distinct yet complementary styles that offer diverse and uncorrelated return potential within UK equities.’ [SG]

VT Holland Advisors Equity (BMW26L0)

Price: 143p

Ongoing charge 1.24%

Set-up and run by Andrew Hollingworth’s Holland Advisors just over four years ago, the VT Holland Advisers Equity Fund (BMW26L0) is a tiny sub-£40 million gem with a track record which would put many much bigger funds to shame.

Benchmarked, like Blue Whale Growth against the IA Global Index, it has put up a highly impressive performance from day one, outperforming 38.9% versus 22.4% from its inception up to the end of May 2025.

Yet, it is over the past three years that it has really shone, more than doubling its benchmark return (77.8% versus 33.3%, based on Trustnet data), making it among the best in the sector.

Hollingworth has done this by investing in good businesses which can generate returns on capital and allocate any extra cash well.

The team are effectively looking at the fastest way possible to compound returns, but without loosening the risk reigns too much. The way they do this is by owning shares in businesses which can grow their own intrinsic value at a faster but sustainable rate.

As the fund’s literature states, ‘we want to find great companies run by great managers available at great prices’.

Current holdings stand at 27, so it’s a concentrated fund which includes Irish budget airline Ryanair, global money transfers business Wise (WISE), chip manufacturing giant TSMC (TSM:NYSE) and Wall Street-listed homes builder and land development firm Green Brick Partners (GRBK:NYSE).

VT Holland Advisors’ small scale does present issues. For one, it is not the cheapest: investors are asked to pay ongoing charges of 1.24% a year. Size also makes it difficult to grab the attention of wealth managers who tend to want to throw multi-million pound cheques at funds, something this one would find difficult to handle. Yet Hollingworth hopes that will change in time, which makes retail investors so important.

It’s not impossible that VT Holland Advisors could, one day, manage £1 billion of funds, but Hollingworth is determined not to change the ethos too do it.

‘If people think it is best to invest with us, that is what they will do. Worrying about the industry structure and how it should or shouldn’t be different isn’t my job and isn’t going to make it any easier. If we are destined to succeed, then we will,’ the manager said in a recent interview with Trustnet.

 

VT Woodhill UK Equity Strategic Fund (BMTRT64)

Price: 96p

Ongoing charge 1.28%

The all-weather, £32 million  VT Woodhill UK Equity Strategic Fund (FUND:BMTRT64) aims to provide investors with a positive return over a 12-month period regardless of market conditions, and will lower volatility than the market.

Fund managers Paul Wood and Michael Bedford, who have over 50 years of markets experience between them, have blown the lights out over the last three and five years, delivering total returns of 33.5% and 50.3%, respectively.

That makes the fund the best performer in the IA’s (Investment Association) absolute return category, more than doubling the sector’s 21.5% return over five years.

The managers have achieved this with annualised volatility of just 4%, which means investors have had a much smoother ride than the underlying market.

As Paul Wood explains: ‘At Woodhill, we aim to protect investors from substantial market declines when risk is high. We are about capital growth when the risk/reward is favorable and capital preservation when it is not.’

Recent market gyrations driven by tariff uncertainty have produced three periods when equities have dropped between 8% and 9% in a matter of weeks.

The fund has protected shareholders’ capital each time, demonstrating the capital preservation skills of the managers.

‘We do not believe investors should put up with seeing dramatic declines in the value of their portfolio. An investment manager should, in our view, do all he or she can to act to both grow and protect investors’ money,’ insists Wood.

That does not mean losing sight of the upside, however, as the performance over the last few years shows. Wood and Bedford populate the portfolio with around 50 large-cap, high-quality companies which are solidly financed and are expected to grow.

Top holdings include pharmaceutical giant AstraZeneca (AZN), global bank HSBA (HSBA), aerospace and defence group BAE Systems and data analytics firm RELX (REL).

The managers assess overall market risk using economic, fundamental and market-related data sets. The fund is hedged around two thirds of the time on average.

The fund has an ongoing charge of 1.28% a year and dividends are paid in March and September. [MG]

 

DISCLAIMER: Steven Frazer has a personal investment in Blue Whale Growth and Fundsmith Equity.

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