The City grandee-backed fund that offers something different
By Ian Orton at TheWealthNet.
14th August 2025.
It is increasingly difficult to identify a high performing investment fund that offers something distinctly different from its peers.
But the Nutshell Growth Fund, managed by Mark Ellis, the founder of London-based Nutshell Asset Management, certainly can.
Since launching in May 2020, the fund had generated cumulative and annual returns of 14.99 percent and 150.95 respectively to the end of July 2025 according to its latest fact sheet. It had done this by eschewing the buy and hold approach typically followed by most of its peers and adopting a very active trading strategy instead.
Given the emphasis placed on the harmful impact of trading costs on investment returns since the advent of the passive management revolution this may seem counter-intuitive. But the approach appears to have worked for Nutshell and Mr Ellis, or at least up to now. This may partly reflect Mr Ellis’ background as a former hedge fund manager and trader along with the fact that trading costs have fallen considerably in recent years. By far the most important contributor to Nutshell’s performance, however, is almost certainly the model that underpins its investment strategy.
At its heart, it is a proprietary investment process that assesses portfolio holdings against a global universe of securities. This uses over 30 metrics supplemented by an array of qualitative factors. The fund is rebalanced every two weeks “ensuring agility in adapting to market shifts and continued optimisation for relative value”. By systematically avoiding overpriced stocks and selecting undervalued assets that meet its high standards, Nutshell claims to deliver growth with lower beta and resilient performance. With 37 holdings at the end of July the fund’s portfolio is relatively concentrated. The top 10 holdings accounted for 54 percent of assets under management (AUM). These include some of the usual suspects such as Adobe, Alphabet, ASML Holding, Mastercard and Nvidia. Given its relative-value active trading policy, however, it is by no means certain that they will feature in the top 10 by the end of August, however.
Nonetheless, the constituents have a “quality” feel about them as does the portfolio as a whole. Its constituents have an average return on equity and net profit margin of 51.2 percent and 31.1 percent respectively. By comparison, the constituents of the MSCI World Index had an average ROE of 9.9 percent and net profit margins of 9.9 percent. Information technology accounted for 41.1 percent of the fund’s AUM followed by financials (18 percent), healthcare (16.3 percent), consumer discretionary (9.8 percent) and communications services (8.8 percent).
Nutshell appears to have attracted at least one significant investor in the form of Michael Spencer, the founder of Nex Group.
Not only does he have a significant stake in Nutshell Asset Management but he also chairs the company as well as investing in the fund. Nonetheless, despite this endorsement, its performance record and the fact that it can be purchased from a large number of retail and institutional investment platforms, the fund had only £138.3 million of AUM at the end of July 2025, with total firm AUM amounting to £395.2 million. Read on TheWealthNet here >