However, Jonathan Longstaff, investment liaison manager, said that the performance of the fund over one year should be viewed in the light of performance over the longer term.
Over three years, the fund has risen by 67 per cent and is 13th in the UK smaller companies unit trust sector, while over five years the fund has risen 75 per cent and is second in the sector.
Mr Longstaff said that the fund had been invested in companies that had outperformed the market before the UK had come out of the exchange rate mechanism. The interest rate cuts that followed meant that other fund managers invested in shares that had underperformed, giving their funds better comparative performance.
He said: 'We are going through a period of consolidation. It wouldn't be right to adjust the portfolio.' He said that the shares of smaller companies were illiquid.
Colin West, assistant director at Prudential Portfolio Management, gave the same reasons for the underperformance of its fund over one year. Over five years, the fund had shown an increase of 37 per cent. Mr West said: 'It is not right to judge a smaller companies trust over a one- year view. Over the last five years, it has had one year of poor performance.'
Thornton said its fund had been boosted by a bottom-up approach. Nick Hodgson, director, said: ''The accent is on quality. We screen companies thoroughly. The fund currently shares in about 60 companies.'Reuse content