While the portfolio’s size means it has a heavy weighting to UK blue chips such as GlaxoSmithKline and Royal Dutch Shell, Buxton’s outperformance has been boosted by some of his more contrarian punts at the smaller end of the market cap spectrum. The following five companies are all high-conviction plays in his portfolio, outside its top-10.
All have gone through periods of underperformance in the last five years or so, but have bolstered Buxton’s fund during the recent surge in markets.
ICAP
This FTSE 250 London-based company claims to be "the world’s leading voice and electronic interdealer broker and provider of post trade risk and information services".
It trades primarily in interest rates, credit, credit derivatives, foreign exchange, equity derivatives and intellectual property – such as patents.
The company currently makes up 1.93 per cent of Buxton’s portfolio and has offices around the world, where it handles trades.
It has had a bumpy ride over the last decade, lagging the FTSE 250 over three and 10 years, and losing significant sums over one and five years.
It has also underperformed the FTSE 350 Financial Services index.
However, it has had a good three months, up almost 15 per cent, according to FE data.
Buxton added to the stock early last year, claiming that it had been oversold.
The stock is currently yielding 5.6 per cent and is projected to increase its dividend to more than 6.5 per cent.
ICAP has a price to earnings (P/E) ratio of 9.8, its cheapest level since March 2009.
Only the Guinness Global Equity Income portfolio holds the company in its top-10.
Genel Energy
One of Buxton’s most contrarian plays is Jersey-based oil company Genel Energy, which currently makes up 1.82 per cent of the Alpha Plus fund.
Oil exploration and production have been out of favour for some time, and the fact that Genel’s primary operations are in Turkey underlines its contrarian characteristics.
The firm was created in 2011 when the Turkish company was acquired by Vallares, an investment company led by Tony Hayward.
Since then it has sustained a loss of 21.46 per cent. The FTSE 350 Oil & Gas Producers index has gained 6.6 per cent over the period.
Performance of stock vs index since June 2011
Source: FE Analytics
It had a particularly poor first half of 2012, but performance has much improved in recent months.
The company has a P/E ratio of 43.3, according to The Share Centre, making it significantly more expensive on valuation terms than ICAP.
FE Alpha Manager John Dodd's Artemis Global Energy fund includes the energy company in its top-10 holdings, as does CF Eden UK Select Opportunities.
Bumi
Indonesian mining company Bumi has made the headlines for the wrong reasons in recent months, with financier Nat Rothschild battling to replace the board of the firm.
As a result of the controversy, and questions surrounding the company’s finances, the stock has lost a painful 59.76 per cent over the past year.
It has significantly underperformed the FTSE 250 index, which gained 25.05 per cent over the period, and the FTSE 350 Mining index, which shed 6.42 per cent, according to FE Analytics.
Buxton believes the long-term case for the company remains intact, however, and is sticking by his investment.
In January 2013 he publicly backed Rothschild’s attempts to change management.
Buxton owns around 2 per cent of the company, accounting for 0.4 per cent of the fund.
No funds in the IMA universe hold the stock in their top-10.
Home Retail Group
The Milton Keynes-based Home Retail Group is the force behind high street home retailers such as Argos and Homebase.
It is currently yielding 0.7 per cent and makes up 1.07 per cent of the Schroder UK Alpha Plus portfolio.
The company has had a rough period over three and five years, losing 41.69 per cent and 33.89 per cent respectively over the periods.
However, it has rebounded more recently.
Over the last year, Home Retail Group has picked up 24.81 per cent, broadly in line with the FTSE 250 index, which has gained 25.05 per cent.
Performance of stock vs index over 1yr
Source: FE Analytics
Again, no funds hold the company in their top-10.
Carnival
This British-American cruise company, headquartered in Southampton and Miami, makes up 3.05 per cent of Buxton’s portfolio.
Carnival is the world’s largest cruise ship operator, running Carnival Cruise lines in the US, the Cunard and P&O lines in the UK and Costa Cruises in Italy.
Over the last five years, Carnival has made 43.74 per cent. It saw a dip in performance in 2010 and 2011, but has come back over the shorter term, with returns of 41.05 per cent in the last year.
The stock's yield has declined from 2008, when it was paying out 7.7 per cent. It didn’t pay out a dividend in 2009, but the figure now stands at 2.6 per cent.
Five funds in the IMA universe hold the cruise line in their top-10, including the GLG UK Growth and UK Select portfolios, and the Schroder Prime UK Equity fund.
Carnival is trading on a P/E ratio of 20.2.