HSL focuses on achieving long-term capital growth by investing predominantly in UK smaller companies. Established in 1887, the trust aims to outperform the Numis Smaller Companies Index (excluding Investment Companies). Its diversified portfolio includes a wide range of sectors, targeting companies with robust growth potential. The trust has delivered consistent performance, often exceeding its benchmark, driven by a disciplined investment approach and strong stock selection, and despite its growth mandate was awarded the AIC’s Dividend Hero status after delivering 20 years of uninterrupted dividend growth.

In this interview we speak to manager Neil Hermon about HSL’s bottom-up research process, and why it’s important not to overpay for growth prospects; how the company has navigated an extended small cap market downturn, and why recent weakness has been more cyclical than structural; the wealth of niche opportunities offered by the UK small cap market; the ‘four Ms’ that guide the company’s investment approach – Model, Management, Money, and Momentum; and the overlaps between growth, value and dividend investing.