We believe that it is wrong to construct a portfolio using the FTSE All Share index to determine how much to invest in a company. (Using industry jargon: we are not closet indexers.) Instead an OLIM portfolio would normally hold between 30 and 40 companies broadly diversified across the FTSE companies.

The typical OLIM portfolio has less invested in large companies than our competitors as these companies are normally efficiently priced. Spending too much time researching them to gain a small short term advantage is misguided, so our investments in large companies are focused on ‘quality' companies with above average long term growth rates and returns. These we expect to hold for the long term, at least four years. How we select smaller companies to invest in is outlined below.