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Offers investors a portfolio of UK equities, managed using a distinctive investment methodology. The fund is a multi-cap strategy with a contrarian value approach, seeking material undervaluation of assets or returns on capital. Within its sector, the fund features in our 'Value-Biased' category.
The fund’s KIID Synthetic Risk and Reward Indicator (SRRI) is 6. This is a regulatory measurement that is, where possible, calculated from the volatility of its weekly performance over a five-year period. A score of 6 means the fund’s historic volatility is between 15% and 25%.
The fund’s volatility characteristics are favourable compared to the index, although its multi-cap, value style has the potential to experience bouts of higher volatility. Different share classes could have differing SRRI scores.
Co-manager, Henry Dixon, leads a team that is dedicated to multi-cap, long-only investment at Man GLG. Jack Barrat is co-manager of the fund and they are assisted by portfolio manager, James Houlden, and analysts, Erin Ennis and Hannah Burrows. Messrs Dixon and Barratt previously worked at Matterley (part of Charles Stanley) before joining GLG (now Man GLG) in October 2013. Mr Houlden and Ms Ennis joined Man GLG in 2017 and 2016, and Ms Burrows joined in July 2022.
The investment team conducts intensive company research with the intention of identifying companies that are trading below an estimate of their replacement cost or their intrinsic value, as defined by their profit stream. In all cases, the companies are cash-generative and typically have strong balance sheets. The objective is to build a portfolio that offers materially better value than the broad market.
The fund typically features 40-60 stocks, spread across the market cap spectrum. The maximum weighting in an individual stock is 5%, with a stated minimum holding of 0.5%. The fund may hold up to 20% in continental European equities. Relative position sizes are a function of liquidity, volatility and the potential upside in a stock. The fund is continuously monitored by Man GLG’s independent risk management team.
The process begins with in-house modelling of the investable universe of stocks using Holt, Quest and Bloomberg, which brings some 1500 eligible companies down to a more manageable 500. More in-depth research is then undertaken to give a greater understanding of a company's assets and liabilities, while ensuring that all off-balance sheet items are accounted for in the analysis. This generates an estimate of the invested capital and equity within a business to create a clear picture of its true value. The value of the invested capital is then compared to its enterprise value to identify stocks where the market is undervaluing the asset base or alternatively, where the company is producing a return on capital that is higher than its cost of capital.
Buy decisions are generated from discovering companies that are trading below replacement cost and are generating cash or whose profit streams are currently undervalued. Target prices are established for each company under consideration. Forecast returns must exceed 20% for FTSE 100 companies, 30% for FTSE 250 stocks and 50% for small companies. The management of all mid and small-cap companies are seen prior to any purchase being made. Stocks are sold when they reach price targets, if the cash flow to a business materially changes or the company receives an earnings downgrade.
Formal documentation, including the fund prospectus and the KIID, should be sought directly from the asset manager. For ease of reference, a link to the ASSET MANAGER WEBSITE can be found above, as well as a link to the ASSET MANAGER FACTSHEET.
Investment Association sector definition: Funds which invest at least 80% of their assets in UK equities which have a primary objective of achieving capital growth.
Read more >At The Adviser Centre, our primary aim is to support financial professionals in their fund selection and suitability work through independently-minded research, borne of decades of industry experience. Our process is framed by the fundamental concepts of “quality”, “value” and “utility”, through which we answer the key questions of why to invest in a fund, how it is likely to behave and how it can be deployed.
The Adviser Centre team members are some of the most experienced in the fund research industry. We can always look forward to robust and constructive discussions and we have great respect for their views and perspectives, which, given the breadth of their fund and market knowledge, come from an extremely well-informed position.
We have known and worked with the team for several years and we value their experience and the insights they provide to our own investment process. The service differentiates itself by its more focused nature and the information on their factsheets is useful in emphasising a fund’s key mandate, exposure and style biases, helping to explain the risk/return journey that our customers can expect.
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