Of the 610 readers that have responded to our poll so far, 40 per cent say they are increasing their exposure to growth at the expense of income. You can vote in the poll here.
For those investors who are looking for new ideas as to how to capture the apparent recovery in the UK, here are some funds that do not get much coverage but that have a track record worthy of consideration. All are under £100m in size.
ConBrio Sanford Deland UK Buffettology
This £13m portfolio has seen a surge in inflows this year, thanks to its strong early performance. It started 2013 at just £3m in size
Manager Keith Ashworth-Lord follows the principles of Warren Buffett, looking for undervalued businesses with a good competitive position. He explained his approach in detail in a recent FE Trustnet article.
Our data shows that the fund has had an excellent run since it was launched in March 2011. The portfolio has returned 57.21 per cent while the average IMA UK All Companies sector fund has returned 31.36 per cent and the FTSE All Share just 28.17 per cent.
Performance of fund since launch vs sector and index
Source: FE Analytics
Ashworth-Lord’s favourite stocks include Games Workshop, Liontrust and Dixons.
The fund is expensive, thanks to its size, but although the listed ongoing charges are 2.93 per cent, the manager says current costs and charges amount to 2.42 per cent and this is steadily coming down as the fund grows.
Cavendish Opportunities
This fund, run by FE Alpha Manager Paul Mumford, broke the £100m barrier over the summer and now stands at £108m.
Mumford has run the portfolio since 1988, making him one of the longest-serving managers on the same fund.
It is a multi-cap portfolio, but is heavily weighted towards the smaller end of the market. Although it has lagged behind its FTSE Small Cap benchmark over the past year – the index has made more than 52 per cent – over the longer term the manager has added significant alpha.
The fund has returned 242.76 per cent over the last five years while the index has made 181.37 per cent. Over the past decade it has made 167.34 per cent compared with 109.7 per cent from the index.
Performance of fund vs sector and index over 10yrs
Source: FE Analytics
The manager has been increasing his weighting to the FTSE 250 and lower end of the FTSE 100 over the past couple of years and has an unconstrained mandate.
This means he invests as much in the AIM, where he has built up his expertise over the years, as he does in the FTSE Small Cap index. Mumford says that the AIM index now contains a much higher quality of company than it has done in the past and should do well on the back of relaxed ISA rules that allow investors to put AIM stocks in the wrappers.
The fund has ongoing charges of 1.58 per cent.
Rathbone Recovery
The £71m Rathbone Recovery fund is managed by Julian Chillingworth and Marina Bond, who were joined by James Baker earlier this year.
The fund is top quartile over one and three years, having made 49.24 per cent over the longer period.
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
It buys undervalued companies that are suffering either because of stock-specific issues, problems in their sector, or themes affecting their industry.
Booker Group is the fund’s biggest holding, at 3.77 per cent, while Unilever is the second-biggest at 3.29 per cent.
Unilever has been under pressure in recent months thanks to the sell-off in emerging markets.
The fund is another with an all-cap approach and a top-10 that is very different to others in the sector. It has the ability to hold up to 20 per cent in European shares, but currently has only 3.67 per cent there.
The fund has ongoing charges of 1.65 per cent.
FP Matterley Undervalued Assets
Another fund to play a similar theme is the £78m FP Matterley Undervalued Assets, managed by Henry Dixon.
The fund is a top-quartile performer over three and five years. Over three years it has made 59.05 per cent.
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
It has built positions in Qinetiq, the former technological research department of the Ministry of Defence, property company Berkeley Group, which has been hit by proposed restrictions on foreign property ownership in London, and miner Rio Tinto.
Matterley is the fund management arm of Charles Stanley the stockbroker and has a number of top-performing funds that are not widely marketed.
Chris Evans, manager of the FP Matterley Equity fund, told FE Trustnet about his approach earlier this year.
The fund has ongoing charges of 0.88 per cent.
