Henderson Smaller Companies Investment Trust (HSL) is managed by Neil Hermon, who has been at the helm for more than 20 years. While FY23, ending 31 May, was a difficult year as growth stocks derated in an environment of rising interest rates and bond yields, this should be put into context as the manager has outperformed the trust’s benchmark in 16 of the last 20 years. Hermon believes that there is a disconnect between portfolio companies’ valuations and the strength of their operations as, faced with higher input costs, businesses have adapted to protect their margins. The manager has taken the opportunity of share price weakness to add some new high-quality names to the portfolio, which would have previously been disregarded on valuation grounds. HSL is now one of just 20 funds designated as an AIC dividend hero.