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The Independent Online
The product: Guinness Flight Global Smaller Companies Fund.

The deal: The fund, an open-ended investment company (OEIC), is managed in Guernsey. Its aim is to achieve capital growth by investing mainly in small companies. It aims to take advantage of world-wide opportunities for rapid growth of companies that show promise of substantial outperformance.

The fund, together with its sibling, the Guinness Flight European Smaller Companies Fund, is a sub-fund operating under an umbrella arrangement. This means that it may be possible to switch out of one fund into another within the range available from Guinness Flight without incurring capital gains taxes.

Minimum monthly investments are pounds 150, or pounds 2,000 for lump sum contributions, with further lump sums accepted over pounds 500. Payments can be made in US dollars, German marks or Swiss francs.

Charges involve a bid-offer spread of 5 per cent. There is also an annual management fee of 1 per cent. Fees and expenses are charged to income where possible. There may also be additional expenses.

Plus points: Guinness Flight argues that over the past few years larger companies have delivered excellent returns to investors, who have tended to ignore their smaller counterparts. As a result, small companies have underperformed. But the time is right for this situation to be reversed and smaller companies should outperform in the coming period. If so, this fund will deliver above-average performance.

Potential risks: While Guinness expects to use its own research facilities, these tend to be small.It will rely heavily on HSBC James Capel's own small companies database, which means that, to an extent, you have fund management at one remove.

The verdict: Guinness Flight has an excellent reputation as a fund manager, but this is one for people prepared to take a risk.

Marks out of five: Three.

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