Interactive Investor

Fund spotlight: Crux European Special Situations review 2021

24th May 2021 11:02

Teodor Dilov from interactive investor

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An interactive investor analyst offers a view on one of our Super 60 fund picks.

The Super 60 fund: listen to Fund Spotlight or read about the fund, it’s your choice.

The TM CRUX European Special Situations fund is run by experienced investors Richard Pease and James Milne, who aim to back around 60 of the best stock ideas and consider four key criteria in their stock selection. First, they look for companies with identifiable business strategies that have high barriers to entry and strong pricing power, which enables them to generate robust earnings with growth potential. They also seek sound businesses that are not highly capital intensive and where the return on capital employed exceeds the cost of capital.

The fund managers select businesses whose managements have proven track records and meaningful equity ownership of the companies they run. Last but not least, companies need to trade on attractive valuations. It should be noted that Richard and James do not hesitate to avoid index heavyweights should the investment case be unconvincing.

What does it invest in?

Currently, the fund has a concentrated portfolio of 46 companies, and has large exposure to economically sensitive areas of the market such as industrials, communication services and technology. In terms of market cap and style exposure, the strategy has more than half its portfolio allocated to large-cap companies, but also has relatively large exposure to mid- and small-caps.

The fund also shows more core and growth features and is underweight in value assets. Among the top 10 holdings are the French multinational energy provider Schneider Electric (EURONEXT:SU), the Austrian bank BAWAG, and the Swiss pharmaceutical giant Novartis (SIX:NOVN).

Performance

  21/05/2020 - 20/05/2021 21/05/2019 - 20/05/2020 21/05/2018 - 20/05/2019 21/05/2017 - 20/05/2018 21/05/2016 - 20/05/2017
TM CRUX European Special Sit I Acc GBP 25.03 -6.51 -3.94 6.06 32.77
EAA Fund Europe ex-UK Equity 29.13 -2.20 -3.52 6.43 33.13

 

Why we recommend it

This fund has a few unique selling points, but it is worth highlighting the well-defined and proven investment approach. Since its launch in 2009, the fund has comfortably outperformed its Investment Association Europe ex UK benchmark. It has delivered a total return of 227% compared to 160% for the sector. In addition, the managers of the strategy offer a wealth of quality experience gained over a full market cycle.

Investor should bear in mind that this is a higher-risk strategy and is more suitable as a diversifier rather than a core holding.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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