Fund of the week: a contrarian to match Bolton
Oct 16, 2009
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When it comes to 'special situations' investing, Anthony Bolton has long been the UK's top dog. But since he left full-time fund management at Fidelity in 2008, finding an equally skilled contrarian investor hasn't been so easy.
Alistair Mundy, manager of the Investec UK Special Situations Fund, might be just the man. His fund is up 37.3% over one year against a 24.7% rise for the FTSE All-Share, putting it ahead of its closest rival, the Majedie Special Situations Fund, which returned 33.5%.
Looking for stocks that have collapsed to unrealistic levels, Mundy only invests in firms with a market cap above £100m. He then screens for strong underlying value, says Sheridan Admans, investment adviser at The Share Centre. This can mean picking out firms with undervalued assets, or that have decent profit potential. He also watches for stocks that have fallen by at least 50% from their five-year peak price, adds Tom Whitelaw at Morningstar.
His aim is to keep stocks over the long term and current holdings include Signet Jewelers, which owns brands such as Ernest Jones in the UK and builders merchants Travis Perkins. There are also some classic defensives in the portfolio. These haven't rallied as much in the recent bull market and include Vodafone, Unilever and GlaxoSmithKline.
All this suggests the Investec fund is a good choice for investors looking for exposure to equities in Britain. But thanks to its contrarian approach, investors "should appreciate that the fund may also have periods of underperformance compared to a more mainstream UK equity fund", says Admans.
Contact: 020-7597 2000.
Investec UK Special Situations Fund top ten holdings
| Name of holding | % of assets |
|---|
| HSBC Holdings |
9.4 |
| Royal Dutch Shell B Ord |
7.2 |
| BP |
6.9 |
| GlaxoSmithKline |
6.8 |
| Vodafone Group |
4.8 |
| Unilever |
4.2 |
| Travis Perkins |
4.1 |
| AstraZeneca Plc |
4.1 |
| Signet Jewellers Ltd |
3.8 |
| British American Tobacco |
2.8 |
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