His £45.8m MFM Slater Recovery fund is no exception. While it has had a torrid time in the last two months, it has outperformed the average fund in the IMA UK All Companies sector over three and five years, as well as since its launch in 2003. FE Analytics has given the fund a Five Crown rating.
Performance of fund vs sector over 3-yrs
Source: FE Analytics
While recovery funds purport to invest in embattled companies and help them recover their share price, one criticism is that such funds just pick strong stocks. With Entertainment One, British American Tobacco and BHP Billiton in its top-10, the MFM Slater Recovery fund looks in danger of breaching that line.
Mark Slater responded to this criticism by saying: "The recovery fund has a broad remit – about 50 per cent of the portfolio is invested in growth stocks (and I would include Entertainment One in this category) with the other 50 per cent invested in value plays, asset situations, yield stocks, special situations, mining and so on."
"When we first bought Entertainment One it was in recovery mode (at least share price-wise). But we are not looking for bombed-out cyclical recovery stocks only – like most recovery funds, we have more of a special situations brief."
With a £3,000 minimum investment, the fund has a slightly higher-than-usual starting capital, but its total expense ratio (TER) is relatively low at 1.54 per cent.
The fund has lost 9.5 per cent in the past year, compared with an average loss of 11.2 per cent from most recovery funds. Over three years it is the best performing such fund.