UK Large Cap Focus - Marlborough UK Equity Income Fund
> Fund Manager, Greg Bennett, remains confident for 2008, “wholesale selling has led to appealing investment opportunities”
> 1st of 82 (IMA) UK Equity Income funds during 2007
> Yield in excess of 4%
Astute top down sector calls have contributed to the consistent out performance of the fund since Greg took over as manager in May 2006. He has largely avoided traditional income sectors such as tobacco and water utilities and benefited from overweight positions in telecoms and oil & gas.
The portfolio is constructed using a combination of short term plays and longer term themes. Having largely avoided the banking sector, Greg recently bought selected banks in anticipation of better than expected annual results. A longer term theme running through the portfolio is the threat of inflation. Pricing power, the ability to pass on rising costs, is therefore a key focus when researching potential investment opportunities.
Since Greg and his team took over the management of the fund in May 2006, the fund has returned 9.36% compared to the (IMA) UK Equity Income Sector average fall of 2.08%. The fund is the top performer since Greg completed the reorganisation of the fund in October 2006.
1 year |
Since portfolio reorg. |
Since mgr apptd |
01/03/2007 |
16/10/2006 |
08/05/2006 |
03/03/2008 |
03/03/2008 |
03/03/2008 |
% Chg |
Rank* |
% Chg |
Rank* |
% Chg |
Rank* |
-1.94 |
3 /84 |
8.17 |
1 / 81 |
9.36 |
4 /78 |
1st Decile |
1st Decile |
1st Decile |
The past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested.
Watch the Marlborough UK Equity Income Fund Manager Interview on MarlboroughTV
Data source: Morningstar, Bid to Bid, UK Basic Rate, Net Income Reinvested. All performance data as at 3 March 2008 . *Rank within (IMA) UK Equity Income Sector.
the "Marlborough way" – quietly, assuredly and confidently.
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Small Cap Focus - Marlborough Special Situations Fund
> Giles Hargreave, in his 10th year as fund manager, has vast experience of all market conditions
> 139 percentage points ahead of next best performing (IMA) UK Smaller Companies fund since Giles appointed and the top performing of all UK equity unit trusts / OEICs over the last 5 years
> Shoots of recovery – fund price rose 4.1% during February
During the recent market downturn, risk aversion has led to the largely indiscriminate selling of small cap stocks. With a vast array of smaller companies to choose from, and many stocks now trading at considerably reduced levels, buying opportunities will no doubt arise for the shrewd investor.
Giles adopts a “bottom up” stock selection process that takes in recovery and oversold stocks as well as companies with longer term growth potential. Smaller companies are more likely to be niche players with their fundamentals and prospects less dependent on the overall health of the economy.
Giles has reduced the cash portion of the portfolio to approximately 8.5% having recently bought into new investments and topped up existing holdings, “The improving sentiment towards smaller companies makes the point that there are many small caps trading well and if left to get on with their lives without being upset by turbulence in the main markets will deliver share price performance.” Giles Hargreave, 3 March 2008 .
1 year |
5 years. |
Since mgr apptd |
01/03/2007 |
03/03/2003 |
01/07/1998 |
03/03/2008 |
03/03/2008 |
03/03/2008 |
% Chg |
Rank* |
% Chg |
Rank* |
% Chg |
Rank* |
-2.92 |
3 / 51 |
283.73 |
1 / 44 |
720.15 |
1 / 37 |
1st Decile |
1st Decile |
1st Decile |
The past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested.
Watch the Marlborough UK Special Situations Fund Manager Interview on MarlboroughTV
Data source: Morningstar, Bid to Bid, UK Basic Rate, Net Income Reinvested. All performance data as at 3 March 2008 . *Rank within (IMA) UK Smaller Companies Sector.
the "Marlborough way" – quietly, assuredly and confidently.
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Bond Focus - Marlborough High Yield Fixed Interest Fund
> Managed by Paul Reed, one of the UK ’s most experienced and respected high yield managers
> Current distribution yield of 9.17% as at 29 February 2008
> High yield bond markets currently trading at deep discounts, “The best investment opportunity since the creation of the Eurobond Market” Paul Reed
This fund invests in Euro & Sterling denominated high yield bonds with the aim of generating a high income and the potential for some capital growth over the longer term. The management team of 5 have managed high yield bonds since the European market was created in 1997.
The team considers the market as a whole cheaper now than at any time since its creation with bond prices already discounting a European recession and savage defaults; selling has been indiscriminate with little reference to credit quality. The sell off has had the effect of reducing the fund’s unit price and consequently increasing the yield towards 10%.
Going forward, expectations in Europe are not particularly bearish and the investment team is confident in its credit analysis. Each bond is selected using a “bottom up” credit model and care is taken to ensure that robust company management is in place with the ability to control risk through differing economic conditions. The fund is diversified with 80+ holdings and a long tail.
This may be a unique buying opportunity with a yield approaching 10% and the potential for substantial capital growth. A further incentive is that all income received from units held within an ISA wrapper will be tax free.
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