Which fund managers are looking for bargains in the January sales?
Stock markets glided higher in 2017, but there was much going on under the surface. Areas such as technology companies saw significant growth in their share prices, while other, less exciting sectors were left behind. Some fund managers spend their time looking among these unloved companies to see if they can find some gems. Schooling Latter highlights four of the best.
Alastair Mundy, Investec UK Special Situations
Alastair is one of the best-known value managers within the UK investment industry and boasts a deep-value, bottom-up approach to stock selection which focuses on unloved large-caps with strong balance sheets. In order for stocks to be included within this fund, they must have fallen by at least 50% over the last five years relative to the market. Alastair describes his approach to stock selection as “looking in other people’s dustbins” for value opportunities and will typically hold these companies for four-to-five years to maximise their recovery potential.
Examples of his largest individual holdings include the banks HSBC, RBS and Barclays, as well as Royal Dutch Shell, BP and Tesco.
Ben Whitmore, Jupiter UK Special Situations
Managed with a distinct contrarian and value-based approach, this fund offers investors access to a reasonably diversified portfolio of large and mid-cap UK stocks. The manager, Ben Whitmore, is hugely experienced and has had considerable success running this type of mandate. He follows a methodical and well-defined investment philosophy looking to buy stocks that are out-of-fashion with the market.
Among his top ten stocks are BP, Anglo American, Standard Chartered, Pearson and Tesco.
Hugh Sergeant, R&M UK Equity Long Term Recovery
Finding undervalued companies that are yet to deliver on their potential is the aim of this fund. The manager uses his three decades of investing experience to identify companies where he believes management have the capability to turn things around. He will also add to his holdings at almost fire-sale prices in volatile times, which further increases the possibility of long-term capital appreciation.
He currently has Anglo American, Lloyds Banking Group and Standard Chartered among his largest holdings.
Nick Kirrage and Kevin Murphy, Schroder Income
This is a deep value-driven fund that invests in companies valued at less than their ‘true’ worth and waiting for a correction. It has little correlation with other income funds, tending to avoid the big income producers in favour of more niche names, where both capital as well as income can grow significantly.
Among the funds top ten holdings currently are HSBC, BP and Pearson.