Standard Life smaller companies manager Nimmo said that online retail had been a key driver of performance in the portfolio, and he expected that growth to continue.
"The online retail market will most certainly continue to grow over the next few years," he said.
"The new generation of global retail brands will heavily rely on the internet."
Many are worried that the UK retail sector will face a difficult Christmas due to the severe weather conditions, and will continue to suffer into the New Year.
But Nimmo believes that the online retail sector will continue to outperform. He is overweight online retail in both Stan Life Inv UK Smaller Companies and Scot Wid UK Smaller Companies Alpha. In both funds, online retail giant ASOS is the top holding, with a 5.6 and 5.1 per cent weighting respectively.
"This is probably the best stock I've ever had," he said.
"Shares are now worth twenty times more than what I initially paid for them in 2006."
"ASOS has already proven that it is a model that can work overseas. Forty per cent of its sales come from outside the UK, and it doesn't lose out on infrastructure costs. It has recently launched German, French and US websites, whilst other UK retailers are struggling badly to expand overseas."
Nimmo said that he would be tempted to increase his stake in the company, but that he has already reached his risk limit: "I don't like to go too far above 5 per cent for any one share," he explained.
As Financial Express data shows, ASOS has performed incredibly well in the last year, with returns exceeding 229 per cent. This is particularly impressive since the FTSE General Retailers Index has underperformed the FTSE All Share Index, with losses of 1.15 per cent since December last year.
Performance over 1-yr
Source: Financial Express Analytics
Such outperformance has certainly benefitted Nimmo's funds, and helped both to substantially outperform their IMA UK Smaller Companies sector in the last year.
Performance over 1-yr
Source: Financial Express Analytics
Nimmo said that 15 per cent of Stan Life Inv UK Smaller Companies is invested in purely online businesses, and lists Paddy Power and Abcam as two particularly successful stocks.
The manager refused to rule out retail companies that do not generate their revenue from the internet however, but said that careful stock selection was crucial in this area: "I wouldn't say the future of retail sales is online, because high street shopping will always have a place in society. However, the retail market is a mixed bag at present. The outlook for companies like HMV, B&Q and Comet is moderate at best at the moment. Many are being left behind by companies like ASOS and Amazon, and will continue to struggle."
The Trustnet Alpha Manager's comments come in light of data released by the British Retail Consortium (BRC) this week, which revealed that internet retail sales jumped 17.6 per cent on a year ago, against a 16.9 per cent increase in November 2009. Conversely, total retail sales only increased by 0.7 per cent, due to a poorer than expected performance on the high street.
Managing director of Nexus Independent Financial Advisers Kerry Nelson agreed that a shift was occurring in the retail sector, and expects the online market to gather momentum.
She said: "If you look at the high street now compared to what it was five or ten years ago, it's completely changed. The shopping culture has been replaced with a café culture, as online buying is so much more convenient, and more often than not cheaper."
"I don't think that this outperformance will be an isolated incident. The fact that we're experiencing such cold weather and are so close to Christmas will obviously add fuel to online buying, but I believe this a trend that we will continue into the long term."