Herald Investment Trust (HRI): Beating the market with 300+ shares

Some thoughts on Herald Investment Trust (HRI). The write-up is my contribution to an investment group in which I am a member. We meet every month or two (currently virtually, but previously face to face) to discuss shares. Each meeting sees everyone chip in with their research.

HRI sharepad share price

The write-up was prompted by a group member saying this trust had performed very well and yet owned 300-plus shares. Contrary to Buffett’s advice, diversification seems to have worked out well for Herald’s portfolio. Mind you, the trust does seem dependent on multi-baggers to succeed! What do you think? I would welcome any feedback or extra info on Herald.



Herald IT (HRI)


  • Offers exposure to unusual/higher-risk strategy: focused on TMT smallcap companies, often with funding requirements.

  • Genuine long-term investor: buys and holds, with exits often through takeovers.

  • Many multi-bagger holdings: ‘investor of last resort’ can lead to bargain buys.

  • Fund size leading to extra diversification: vast majority of holdings are sub-1%. Can HRI operate at scale?

  • Performance very acceptable: but gains driven in part by re-ratings while the Nasdaq has offered similar sector returns with no active-manager risk.

Long-term approach

I like HRI’s long-term mindset:

The Company has consistently invested in early stage companies, often providing primary development capital, then holding investments for long periods , regularly providing further capital when needed.” (AR 2020)

Of the 20 largest holdings as at December 2020:

  • 9 have been portfolio members since 2010 or before;
  • 4 since 2011;
  • 2 since 2012;
  • 1 since 2014;
  • 2 since 2015;
  • 1 since 2016, and;
  • 1 since 2018.

What happened to the ‘class of 2010’ is impressive. Of the 20 largest holdings as at December 2010:

  • 10 were acquired;
  • 9 remained portfolio holdings at December 2020, and;
  • 1 was sold.

The 19 positions that were held or acquired could of course have been trimmed during the intervening 10 years.

But the impression given is a genuine long-term buy and hold approach.

Turnover within the portfolio seems much more likely to be forced by acquisitions rather than by conventional ‘sell’ decisions.

Hunting for multi-baggers

Performance is supported/driven by multi-bagger stocks:

"The evolving nature of technology means there is a wide divergence of performance between winners and losers, but the winners can be spectacular. " (AR 2020)

The earlier table showed the 20 largest holdings had a book cost of £68m and a December 2020 valuation of £422m – i.e. the initial investment was multiplied 6.2x.

Examples of recent multi-baggers:

a) "I do gulp at the valuation of ITM with a market capitalisation of £2.8bn, and minimal revenues, we have realised gains of £11m during the year. We did participate in funding rounds in 2012, 2014, 2016, 2017 and 2019 as well as one in 2020. In the 5 rounds prior to this year I invested in aggregate £4.0m at an average price of 30.1p, and a further £1.5m at 235p in September. The funding rounds in 2016 and 2017 were at 15p and 17p *respectively when the company was friendless, and which were at a lower price than the 50p level in 2012." (*AR 2020)

Buying as low as 15p – share price now 386p having seen 700p earlier this year.

b) "Ilika develops solid state batteries. We invested in three funding rounds in 2014, 2015 and 2018 an aggregate sum of £2.1m, at prices of 60p, 73p and 20p in that order, and a further £1.1m at 40p in March 2020. I am astonished it has closed the year at 200p." (AR 2020)

Buying at 40p, now at 200p.

c) "We were fortunate to acquire most of the Avesco holding at distressed levels in June 2009 at the height of the financial crisis at 22p . The take out value of 650p was most welcome, and the premium on the price the day before the takeover was 125%" (AR 2016)

Buying at 22p and selling at 650p.

Sometimes the only investor – contrarian opportunities?

HRI seems happy to invest where others are hesitant. The fund may therefore be able to invest at bargain prices in companies keen to raise cash. The 2017 report states:

"There is a surprising level of entrepreneurialism in the UK relative to other countries, as well as skills. In a world awash with cash the area of conspicuous value is small companies that need cash***, because debt funding is not available*** . That is part of the reason why the UK continues to be a surprisingly large element of this global fund."

Some examples:

a) "In percentage terms, Zoo Digital appreciated the most (by 550%). The patient support that we gave to the company during a technical transition has been rewarded. In the darkest period, only Zoo’s chief executive and Herald supported the company with cash to enable the company to survive . Although still a small company, based in Sheffield, it has an impressive customer list with Netflix adding to long standing customers such as Disney and Warner." (AR 2017)

b) "This is the nature of long-term early stage investing, but had we not invested the company [ITM Power] would not have existed for the more recent gains . This provides an emphatic example of the long-term support and funding that we provide for early-stage companies."(AR 2020)

c) "The most significant takeover was Statpro , in which the Company had an 11% stake. We went above our customary 10% threshold when they could not draw on their overdraft facility when Kaupthing went bankrupt. We, along with Statpro’s Directors, provided emergency funding … the company would not have floated and survived if we had not provided it with necessary capital." (AR 2019)

Plenty of companies have been asking for money:

"We have been made insiders for secondary fund raisings over 100 times in 2019 and we have participated in 62 placings with an aggregate value of £40m. There were other occasions when we would have participated or invested more had there been more co-investors as we are disciplined in ensuring that we generally do not exceed 10% ownership of the outstanding share capital." (AR 2019)

A strategy involving frequent placing participation does allow HRI to obtain meaningful stakes in microcaps.

17.5% of the portfolio is normally in companies yet to become profitable (Youtube interview)

Sometimes the only investor – not enough support?

HRI added to that Statpro takeover that "Unfortunately, there are not enough other long-term investors around." (AR 2019)

Which can mean some of HRI’s investments are ‘abandoned’ by the market and succumb to low-ball offers:

"We had confidence in the company [ Servicepower Technologies ] longer term and would have liked to have stood our corner in a fund raising, but with an 11.5% stake were reluctant to invest alone. To our frustration, the directors rationally on their part did not want to be diluted at a derisory valuation, so chose to exit the company before it was fully ripe. A Canadian company made a first offer at 5p, which was 100% higher than the price at which the shares had been languishing, and a counter offer came in at 6p. This colourfully illustrates the state of UK capital markets. Cash everywhere except where it is needed. UK investors are particularly poor at investing in break-even or loss making businesses. The take out valuation was little more than one times revenue. Such a low valuation is very unusual in US markets, so we were reluctant sellers on this occasion. We wish there were more like minded long term co-investors ." (AR 2016)


HRI’s portfolio is becoming more diversified. Perhaps future returns will not be as great as past returns as extra holdings are added.

Portfolio holdings have risen from 252 for 2016 to 271, 285, 288 and 324 for 2020 – i.e. up 28%

HRI focuses on sub $3bn companies, and in practice invests in much smaller firms:

“We do not make investments when the market capitalisation exceeds $3bn…we wish to retain our focus on earlier stage investments for new positions.” (AR 2020)

HRI admits:

We have always focused on providing development capital to emerging companies but 25% of the Company’s net assets now exceed $3bn market capitalisation through so much capital appreciation. In addition, the scale of the Company makes it more challenging for new investments to make a meaningful impact on performance.

HRI’s largest portfolio position during the last 10 years was Imagination Technologies at 5.3% for 2011. The largest position thereafter has ranged from 2.6% to 3.9% (3.2% for 2020).

The chart below shows the top 20 holdings representing a steadily smaller proportion of the portfolio as total assets increase:

For 2020, the 20th holding represented 1% of the portfolio. The average weighting for a holding outside the top 20 was 0.2%.

Can HRI operate the present strategy with, say, assets of £3b versus £1.5b today? Not sure. "What is HRI’s asset ‘capacity’? " would be my first question to management.

Lots of companies means lots of research

Management company HIML employs 20 people, so presumably each employee monitors 15-20+ companies. Research process involves lots of meetings with managements:

"Analysis entails a prolific number of meetings with companies, either at Herald’s offices, site visits or at conferences globally, as well as broker-hosted meetings. In addition, Herald relies on independent industry research and published company filings, statements, presentations, websites and broker research. " (AR 2020)

I liked this:

"This [MIFID] exercise has focused our minds on how few investors attempt to invest globally in small companies as we do. In overseas markets, we are often the only foreign investor to visit individual companies ." (AR 2017)

Lead investor Katie Potts is 62, so retirement/succession planning could be a medium-term issue.

Punchy commentary

The reports are peppered with some welcome forthright views.

On the environment:

I recognise the aims of the Extinction Rebellion demonstrators sleeping in the street in which I live but I arrogantly believe that we at Herald have done and will do far more to help alleviate global warming through appropriate investment of primary capital in emerging technologies .” (AR 2020)

On board diversity:

There is one issue where I am firmly at odds with the regulatory pressures and that is the requirements for board diversity. In short there are simply not enough experienced women in the sector and of suitable calibre to fill a third of board posts in the TMT smaller companies space in which we invest and we have seen instances of unsuitable candidates being appointed and doing real damage.” (AR 2020)

On share options:

"When I hear companies justifying 5% dilution each year to keep good staff I shiver, and think of adverts in 2007 for 125% mortgages. It is a bubble and many valuations do not reflect the viciousness of this dilution ." (AR 2016)

Performance and rerating

A useful table from the 2020 report:

HRI’s portfolio P/E has risen from c17x to c31x during the last 7 years – an 82% re-rating.

Share price was 2,245p on 31 Dec 2020 and 685p on 31 Dec 2013 – a 228% gain.

Portfolio earnings are therefore up 146% in 7 years, which helped trigger the 82% re-rating.

With the portfolio P/E at c31x, HRI may not benefit from a further 82% re-rating during the next 7 years.

Note the small-print that the portfolio P/Es exclude loss-making companies.

The 2010 report showed P/Es at much more modest levels:

Had you wanted to back ‘tech’ 10 years ago, a Nasdaq 100 ETF could have been a plausible alternative and would have outperformed HRI:

The relative performances over 5 years or less are much closer, although the Nasdaq ETF has no active-manager risk.

The Nasdaq is essentially a 50:50 split between 8 big names (Apple, Microsoft, Amazon, etc) and a 92 long-tail positions of 2% or less. So an equal mix of ‘proven quality’ and ‘potential future multi-baggers’.

Both HRI and the Nasdaq ETF have trounced the FTSE 100.


I bought this for my partner 's portfolio as it is well-respected and has a good track record. But it is a very odd fund. With 300 or so holdings, it should be like a tracker fund but what exactly is it tracking? When I looked at the list of holdings, I did the exercise of thinking of a smallish company and seeing if they held it. In most cases they did. Unfortunately, it held quite a lot of my dud holdings, such as Bango and IQE, which had been good “momentum” buys which had gone wildly wrong. I bought them when I was trying to build a bit more discipline than just checking a few ratios and taking a hunch. I now would look back at their 20 or so year history of making losses and refrain from buying. It also held Boku, which has been oscillating between about 80p and £1.90 for the last three years. It also seems to have holdings which don’t seem like tech to me, such as Diploma or EMIS. As you say, they are long-term holders and they have bought some high fliers to more than compensate for the many duds. Perhaps Katie Potts is an example of the Texas sharpshooter fallacy. If you buy 300 small caps maybe enough of them will turn out to be winners.

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Hi Diogenes

Yes, I noted IQE and other duds within the annual reports. Something I omitted from the write-up was that HRI does not (as far I can tell) outline its investing approach in the same manner as, say, Fundsmith or Buffettology. So there is a bit of a ‘black box’ style going on here, especially with assessing the loss-making firms. I suspect duds come with the territory with this approach, and I am not entirely sure whether HRI (or anyone) can predict whether a holding will become a big winner or a dud over time. I am also not sure of the winner-to-dud ratio. So far the approach has paid off, but maybe randomly picking 300 TMT small-caps could have provided similar results.

Another member of the group is doing further research on HRI, and I will report back with any useful findings.


Thanks Maynard,

Interesting and detailed writeup. As Diogenes says, it does come across as a kind of highly idiosyncratic fund. With the discount to net asset value at 16%, clearly investors are somewhat wary towards it. It was on around a 20% discount from 2008 to 2017.

The fund category is global smaller companies but about half of assets are in the UK. Plus it appears to be mainly in the IT sector. The objective is to focus on communications, multi-media and technology. So it is kind of a mid and small-cap tech media and comms fund with a big bias towards the UK.

What strikes me as Diognenes says is the they have held quite a lot of weak stocks as well as the big winners. So the quality threshold for positions seems somewhat low. Losers in 2020 for the fund included Time Out, Aptitude, ViaSat, Kromek and Wilmington.

The winners were ITM Power, Five9, Kindee International, BATM and Ilika.

Given that Herald seems to be founder owned and run perhaps some level of uniqueness is to be expected. For example, they still talk about TMT - technology, media and telecommunications - a term that died with the dot-com boom.

The overall question in this article I think is whether a 300 stock portfolio make sense and to highlight that it has worked out in this case. Probably for smaller companies you might need a larger portfolio if you are looking at earlier-stage companies.

Probably what the fund manager is doing is saying we might not know which company will win but we know the exciting areas to invest in. Or they have small positions in things to test the waters.

It all seems a bit odd and there is a lack of focus on owning winners IMO. For example, owning OnTheMarket and not Rightmove. The fund also seems to be in part a venture capitalist given the stage at which it invests.

For me a fund like this seems to go in the ‘too hard tray.’ For the level of risk they take and the need for manager skill in this area, are the returns that great? For example, last year the big driver for them was ITM power. Hardly a low risk company.

It seems to me that the risk with a Trust like this is that you buy it in a similar scenario to 2000 and then it goes nowhere for 10 years or more. This is because the Trust is constrained to invest in a narrow area even if stocks in this area are too expensive and unattractive.

Secondly, the lower quality threshold also creates more downside risk. Lastly, HRI doesn’t appear to be very shareholder friendly. The website is pretty terrible and they don’t buy back shares despite the discount.

You would also question why the bias towards the UK? It is likely to be because Herald is managed from the UK and has limited research resources. But this is clearly a weakness given the lack of scope to meet the management of companies outside of the UK in its area of focus.

Thanks, Andrew

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Re the riskiness of HRI, I note that, according to Sharepad, it has a sortino ratio of 0.08, steady over the last 4 years. Its sharpe ratio has also been 0.08.

Personal Assets (PNL), a very conservative trust, has had a sharpe and sortino of 0.05 over the same period.

Scottish Mortgage has had a sortino of 0.08 and a sharpe of 0.1.

I wonder whether they are calculating the ratios properly! Surely PNL ought to have higher ratios than either of those “risky” trusts

Very interesting fund. In terms of the # of holdings, I believe both approaches work. We have seen the success of someone like a Peter Lynch who owned 100s of stocks and a David Gardner who takes a VC like approach to stocks. This is juxtaposed against highly concentrated investors like Buffett.

We have even seen people switch (Joel Greenblatt ran his hedge fund as highly concentrated, then switched to running a magic formula based diversified approach).

I think what helps Herald is its international approach, so the investment team can “turn over lots of rocks” to find companies to fill the portfolio.

Hi Andrew,

Thanks for the post and welcome to the forum.

Can’t really argue with any of your points.

Yes, part of the uniqueness I guess is that few, if any, institutions, are investing in a similar manner. So there is some scope to create an investing edge from that – e.g. being at the front of the queue for placings perhaps, and being the ‘investor of last resort’ in some situations. But fundamentally the trust is backing fledgling businesses, many of which require extra funding, which inherently provide greater scope for upsets. The trust is hoping to back tomorrow’s winners, which is why it backs OnTheMarket and not Rightmove :slight_smile:

Yes, I would agree. Similar returns could have been achieved through a Nasdaq ETF, which for many is the default investment option for anything ‘tech’. The annual report said the trust’s analysis “entails a prolific number of meetings with companies” and I just wonder if the edge as such is through meeting management and identifying good leaders that way. Mind you the dud count seems high so whatever the approach is, it is not perfect.


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Hi Maynard,

I don’t have a lot of insight to add, other than to comment I watched Katie Potts at Mello Derby in 2014 and invested shortly after , so am sitting on a 3-bagger and just bought a little more, based on nothing more than sticking with my winners.

It does seem that a few big wins make up for a lot of small losers and it is necessary to cast the net wide to ensure that there are some winners going in. Maybe I see echos of my own slightly over diverse portfolio!

Given Katie’s track record, I’m prepared to not only let this one keep running but to add some new capital. I hope the next 7 years is as rewarding as the last!


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Hello Maynard,

Playing devil’s advocate, and certainly meaning no disrespect to any other commenters on the board, I don’t understand why holding 300 shares is considered to be a tracker and sub-optimal in portfolio terms by many?

This isn’t an uncommon view. As you say, a lot of people would quote Buffett as diversification being a substitute for ignorance and refer to the ‘20 investing slots’ over a life-time.

In reality though, how much do we actually know about what happens in a board-room of an individual company and therefore how can we risk a large holding in one company? What about ‘black swan’ risk at the individual company level?

Looking at the numbers of companies there are approximately 2,000 UK and 5,500 US listed companies. Holding 300 companies from these would represent 4% of the total . (I appreciate investment trusts have been double-counted).

Assuming due diligence on purchase is done , a relatively large portfolio of 300 listed companies would out-perform the ‘average’ company return over 10 years by a large amount, because the portfolio is made up of the better companies. (There are a huge number of poorly performing companies in the indices, as you know!)

The investor would therefore out-perform the market by a huge amount and have a much smoother equity curve (and so less stress), than would be the case with a 20 investment portfolio. Also they would be less likely to be shaken out of positions, in error due to mental pressures, along the way and so out-perform the benchmarks because the holdings are relatively smaller.

Is it really worth the risk of a small number of companies in an attempt to shoot the lights out? Not for me - I appreciate everyone is different, though.


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Thanks for an excellent analysis of a trust which has been on my watch list for a long time. It has performed well over the last year but over a longer term 3,5, and 10 year basis it has lagged well behind the likes of Polar Capital Technology (PCT) and Allianz Technology (ATT). They have clearly benefited from their exposures of 70% plus to the US tech stocks whereas Herald has a US exposure of just 22.9% according to Morningstar’s statistics. The last two have chunky exposures to the likes of Microsoft Apple, Alphabet and Facebook whilst Herald has a much more diversified and heavily UK-skewed portfolio invested in much smaller cap shares. The difference in performance is reflected in PCT and ATT having a Morningstar Top 5 star rating whilst Herald gets just 3 stars.

However, my main reluctance to invest in Herald stems from the poor quality of some of its investments which have been stuck in its portfolio for more than a decade. In 2010, as a relative newcomer to investing I invested in Ten Alps, a media outfit founded by Bob Geldof after it had been tipped by John Lee, the FT investment columnist. Ten Alps has been one of my worst ever investments but I stuck with it far longer than I should.

Whenever the company seemed on the brink of going bust, which happened several times, Herald stepped in with extra money. Geldof has long gone and the business, now renamed Zinc Media has been through several management team and hugely diluted its share capital. Over the years I attended the company’s AGMs and tried to speak to management which was clearly not interested in retail investors.

However, I stuck with my shrunken investment for a couple of reasons. The company employed several of the UK’s top TV documentary makers whose programmes regularly won awards. In addition, I was rather naively impressed by the continued loyalty of Herald whose stake has risen to 39.5% as a result of the various rescue financings. I assumed that Herald’s fund managers had done their homework. Zinc now seems to be on the mend but I would be very surprised if Herald ever comes close to recouping its investment.

My experience with Zinc has provided me with a couple of warning light for future investments. Steer clear of small company managements who do not return your calls and cut short their AGMs to meet the busy schedules of professional investors. Equally important do not automatically assume that the sizeable presence of a respected institution on a company’s share register is a good sign. One of the very few advantages of being a small investor is that it is much easier to exit an investment than is the case with an institution stuck with an illiquid stock.

Herald has some excellent companies in its portfolio, such as GB Group, its biggest investment. But it also has a lot of dross, like Zinc.


Hi Ben,

Well yes, but few funds would ever hold several thousand different holdings to get that ‘average’ performance.

The benchmark investment for most is a tracker, which in the UK is the FTSE 100 with 100 shares or the FTSE All-Share with c600 shares. Herald’s 300 shares do not seem that bad compared to 100 or 600 shares, but bear in mind the top 10 shares represent 40% of the FTSE 100 and 30% of the All-Share. So even though trackers hold many shares, they are biased towards a relatively small sub-section. Trackers arguably are biased towards better companies, too, as they are market-cap weighted and so over time back winners and (eventually) cut losers.

Still, Herald has outperformed the FTSE indices and so its 300-share approach has worked, albeit through ensuring several multi-baggers offset all the duds. I am not sure an individual investor could easily replicate Herald’s 300-share approach with sufficient research.

Stock-picking is always educated guesswork at best and ‘black swans’ do seem quite common! Yet many of us (including me!) think we are better than average and can trounce the market with our next multi-bagger. Basic human nature I suppose. Is it always worth the time, effort and risk? Probably not. Funds and trackers are best for many. But if you enjoy looking at companies and understand the risks, then why not have a pop at shooting for the lights? At least that is what I tell myself!



Hi Maynard,

Well yes, but few funds would ever hold several thousand different holdings to get that ‘average’ performance.

I didn’t intend to suggest it was so. I was postulating that holding 300 ‘better than average’ companies is not necessarily a tracker, which is true.

Trackers arguably are biased towards better companies, too, as they are market-cap weighted and so over time back winners and (eventually) cut losers.

I disagree with this ‘survivorship bias’ argument. Trackers are not biased to current better companies, just historically better companies, companies which have been able to raise capital in the past or companies who do a lot of mergers and/or acquisitions. Current market cap does not indicate a great company now or in the future, so why hold them?

i.e. why would one want to take the loss on companies which were structurally correct historically when they amassed their capital, but are no longer so and doomed to declining or negative ROCE/CROCI. They will be a huge drag on future performance of a performance and indeed any index/tracker of which they are a part.

Is it always worth the time, effort and risk? Probably not. Funds and trackers are best for many. But if you enjoy looking at companies and understand the risks, then why not have a pop at shooting for the lights? At least that is what I tell myself!

My problem is researching into the minutiae of an investment gives the investor a feeling of control over their investment which in reality does not exist. There is a trade-off between time spent in research and return attained. I also enjoy researching companies and I do enjoy reading your research and others such as Richard Beddard. DIY investing is dangerous for some, however. If I use an analogy, I read 90% of drivers think they are better than average drivers!

Thanks for getting back to me.



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“Trackers are not biased to current better companies, just historically better companies, companies which have been able to raise capital in the past or companies who do a lot of mergers and/or acquisitions.”

This reads like a description of HRI. It has a whole stack of holdings in companies whose best days are either behind them or have, arguably, never arrived. We have listed a few of them above, to which you can add questionable ones such as Idox or Access Intelligence. If you go through the 300 or so holdings, it would probably be easy to come up with at least a dozen more. It seems to behave like a tracker even on your terms and the lack of a stated investment rationale makes it hard to discern what you are paying for. That said, it has posted good results of late and I am one of the people who have a stake in it!

If you compare it to the L&G Global Technology Index Trust, it has broadly comparable performance but L&G charge 0.2% against 1.1% for HRI for running a similar number of holdings, I think 250 odd for L&G. It is certainly worth wondering what the benefits of active management are here.


Hello Diogenes,

True, and I agree with the diversity of success of their holdings, but I interpret their strategy differently from a tracker.

From HRI’s website, they say the following on their investment philosophy;

We endeavour to offer a relatively low risk way of investing in stocks with high risk on a sufficiently diversified basis that the risk is greatly diminished, whilst still aspiring to premium returns.

The evolving nature of technology means there is a wide divergence of performance between winners and losers, but the winners can be spectacular.

For me, HRI is an example of factor investing, rather than tracker investing.

So for this investment trust, the factors are;

  1. smaller companies out-perform larger companies over the long term
  2. the tech sector will outperform over the longer term, and the tech sector is their ‘circle of competence’.

I think HRI ignore the individual performance of their companies over the medium term, hold on for dear life based on confidence in their initial research process and hope that time will be their ally. Overall this results in multi-baggers outperforming some shocking losses on the individual company level. They hold onto the losers because they don’t want to be shaken out of positions which may be profitable in the long-run.

This seems to explain why they ignore the dogs which are barking within their portfolio (very loudly!) , and rely on the (few) multi-baggers, as Maynard mentions.

Possibly a bit of coffee-can investing is in their strategy as well?

If you invest in 300 companies are you likely to get a few multi-baggers? I think so, if you are investing within your circle of confidence.

I agree the charges are too high relative to their competitors.

Looking at the chart, from '94 until '16, HRI appears to have been a tracker when compared to the TechMARK focus index (a pure-blood tracker), but appears to have gained some alpha after that point (apologies - I don’t know anything about the L&G index trust).



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Today’s Daily Telegraph Questor tip is, by chance HRI - see extract below. Rgds Roger

Questor: Britain’s forgotten tech trust has rewarded our faith – so why the 17pc discount?

Questor investment trust bargain: shares in Herald have risen by 80pc since this column’s tip two years ago but can still be bought cheaply

Since we tipped the shares in early 2019 they have risen by 78.7pc as the manager, Katie Potts, has built on her extraordinary record since she floated the fund in 1994. Yet for much of her 27 years as an investor in technology companies, Potts’s achievements have gone unheralded, if readers can excuse the pun.

A large portfolio of 349 stocks means that Herald is not betting the farm on any of these companies, however. Given the trust’s focus on small technology, a sector that can yield spectacular failures as well as outstanding successes, this diversification is no bad thing.

Potts’s record suggests that her approach works and doesn’t merit the discount the market has given to her trust’s shares. Keep buying.