Nimmo’s fund now stands at £1.1bn, having grown by £700m over the last three years. It is now closed to new money, but can still be bought on various platforms, including Hargreaves Lansdown and Bestinvest.
Many experts have expressed concerns over the fund’s flexibility, pointing out that Nimmo holds a number of mid caps and even some larger caps in the FTSE 100.
However, the lead man says concerns over liquidity are "unfounded".
When asked whether the fund and mirror investment trust should now be viewed as mid cap portfolios, Nimmo was unequivocal in his answer: "No. Both of our products are smaller company portfolios."
"We always make sure 80 per cent of our OEIC is in the bottom 10 per cent of the market. Within that range some of those companies can reach the size of 1.5bn to 1.6bn."
"The problem is, I don’t think many people understand the size of smaller companies. We look at the Numis Smaller Companies index as a benchmark, which is not part of the FTSE All Share, and that is where the confusion comes from, I think."
"The FTSE All Share is split off between the different FTSE indices. The FTSE Small Cap index only represents a very small part of that and is completely useless as a benchmark. It only uses 1.25 per cent of the market, which is a waste of time."
"It is a very narrow list and therefore not an investable index. However, it does mean that by using the Numis small cap index, we hold companies that are also part of the FTSE Mid 250," he added.
FE data shows that the fund had grown from £441m in December 2009 to £1.3bn in June 2011.
Nimmo says that even though the fund has grown a lot bigger over the last few years the type of company he buys remains the same.
"I have been asked, with the OEIC being so big, whether I’m finding it too hard to find new investment ideas. This isn’t the case," he said.
"Looking back at what I have been buying and selling over the last few months, I am really comfortable with the sort of things in the portfolio."
"Under a £400m market cap, there are some absolutely fantastic companies such as Ted Baker, PayPoint and Amerisur Resources."
"We like to run our winners, but we have been selling the likes of ASOS and Paddy Power. We have also sold out of the IG Group after it became a multi-billion pound company."
"I think that is the beauty of long-term investing, because as we have a five-year time horizon it means we don’t have to trade aggressively to generate outperformance. However, that can mean we hold bigger, smaller companies."
Nimmo has run the four crown-rated Standard Life UK Smaller Companies fund since its launch in January 1997.
According to FE Analytics, over that time the fund has returned 664.74 per cent while the IMA UK Smaller Companies sector has returned 289.20 per cent.
Performance of fund vs sector since Jan 1997
Source: FE Analytics
The fund also has a similar annualised volatility compared with its sector over the period.
While the fund officially uses the IMA UK Smaller Companies sector average as its benchmark, Nimmo also looks at the Numis Smaller Companies index. It has returned 332.78 per cent over the period.
Standard Life UK Smaller Companies is also a top-quartile performer in its sector over three, five and 10 years.
Nimmo runs a fairly concentrated portfolio of 55 holdings. The two largest individual holdings are Telecom Plus and Hargreaves Lansdown, both of which Nimmo has a 4.9 per cent position in.
The Standard Life UK Smaller Companies Trust is very similar in its make-up, with an almost identical top-10. It is currently trading on a discount of around 6 per cent.
Nimmo says the widening discount is a result of investors taking profits.
"I think one of the issues may be that shareholders who have seen very strong gains over a long period have seen the recent rally as a good time to take profits, as they need to take their capital gains tax allowance before the end of the financial year," he explained.
"Investors with a horizon of any length of time need to take profits at some point."
Nimmo's open-ended fund has an ongoing charges fee (OCF) of 1.69 per cent. Nimmo’s trust has an OCF of 1 per cent and is 9 per cent geared.