Headed-up by FE Alpha Manager Mark Slater, the fund aims to achieve long-term capital growth by investing in UK companies with attractive price/earnings growth ratios. It has a bias towards small and mid cap stocks.
His much-admired investment process focuses on companies with strong cash flows and above-average earnings.
Data from FE Analytics shows that over the last three years, the fund has returned a massive 114 per cent, more than four times the average UK All Companies fund, which has returned 26 per cent.
Performance of fund vs sector over 3-yrs
Source: FE Analytics
The fund is also a top-three performer over one- and five-year periods, returning 56 per cent and 101 per cent respectively. To put that in context, over five years the sector average returned just 21 per cent.
The fund’s performance has come at a slight volatility cost. With a score of 21.9 per cent over three years it is slightly more risky than the sector average, which scores 19.8 per cent.
Slater says the performance of the fund has been driven in part by strong showings in two of its largest holdings.
The first is Entertainment One, the company behind children’s favourite Peppa Pig, which recently announced a lucrative merchandise deal in the US.
The second is Chinese pharmaceutical holding company Hutchison China Meditech. The stock represents the fund’s largest holding, with nearly 10 per cent of assets under management exposed.
"The company will benefit from an expected growth of 20 per cent per annum in the Chinese health market in the years ahead. It provides a good example of the above-average and sustainable growth outlook that the fund is targeting," said Slater.
Healthcare represents one of the fund’s largest overweights, with exposure nearly twice that of the average UK All Companies fund. Slater also backs telecoms, media and technology. MFM Slater Growth has 17.5 per cent exposed to the sector while the average fund only has 7.5 per cent.
In a recent interview with FE Trustnet, Slater picked what he thought would be the five best-performing companies in 2011.