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Buffettology’s Ashworth-Lord: ‘Rotation to value reads like a Who’s Who of everything we don’t invest in’

07 April 2021

Keith Ashworth-Lord’s CFP SDL UK Buffettology fund has just marked its 10-year anniversary, amid a market rotation away from its preferred growth stocks.

By Rory Palmer,

Reporter, Trustnet

The rotation into value stocks has caused a short-term blip in performance for £1.6bn CFP SDL UK Buffettology fund, but manager Keith Ashworth-Lord says he has been using it as opportunity to buy the quality-growth stocks he favours.

CFP SDL UK Buffettology has just marked its 10-year anniversary and is currently at the top of the IA UK All Companies sector since launch. Ashworth-Lord, an ardent admirer of famed investors Benjamin Graham and Warren Buffett, seeks to invest in excellent businesses at a fair price.

Two examples of stocks that make the cut for the manager are long-term holdings Games Workshop and Dechra Pharmaceuticals, which display characteristics of growth potential, pricing power and barriers to competitor entry – which make them suitable for inclusion in the portfolio.

However, Ashworth-Lord noted that characteristics such as this are being overlooked in the current value rotation, which is instead preferred cyclical businesses that would perform better in a stronger economy.

Value stocks have significantly outperformed growth and quality over 2021 so far. This means that CFP SDL UK Buffettology is in the bottom decile of the IA UK All Companies sector year-to-date with a 1 per cent return (compared with 7.27 per cent from its average peer).

“The current so-called rotation to value reads like a Who’s Who of everything we don’t invest in, so is giving us a buying opportunity to add businesses to the portfolio which we have had on the watch list, including Quartix and Team17,” said the manager.

“There are also excesses in the US market which might yet create some favourable opportunities if there were to be a meaningful pull back.”

Performance of UK Buffettology vs sector since launch

 

Source: FE Analytics

Since launch, CFP SDL UK Buffettology has made a 284.54 per cent total return, while the average fund in the IA UK All Companies sector has made 96.62 per cent.

It has an ongoing charges figure (OCF) of 1.14 per cent.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.