Interactive Investor

Fund spotlight: Marlborough Multi-Cap Growth

26th April 2021 17:15

Liberty Godfrey from interactive investor

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

The Super 60 fund
Listen or read about the fund, it’s your choice.

Marlborough Multi-Cap Growth aims to provide capital growth over a period of five years and aims to generate greater returns than the FTSE All-Share Index over any three-year period. The team aim to achieve this through investing in UK equities of all sizes - across the market capitalisation spectrum.

The manager follows a high-conviction approach, focusing on companies with good growth prospects.

Launched in 1995 as the Marlborough UK Leading Companies fund and renamed in 2014 to reflect its multi-cap approach, the fund has a very strong track record and has been managed by the highly experienced manager Richard Hallett for more than 15 years.

What does it invest in?

The fund follows a multi-cap approach with around 18.4% in mega cap, around 15.3% in large cap, around 37.1% in mid cap and around 15.3% in small cap. Currently, the fund is £286 million in size, and is invested in 49 stocks, giving a high-conviction approach with relatively meaningful investments.

The fund has demonstrated a strong long-term track record of investing in the UK and follows a process to source companies with sustainable competitive advantages that can be used to raise prices or take market share.

Top sector exposures for the fund include consumer discretionary at just over 25%, industrials at almost 23%, and technology at just over 19%, as at the end of March 2021.

Some of its largest holdings include Future (LSE:FUTR) (a 4% weighting in the fund), which is a global multi-platform media company within the technology sector, JD Sports Fashion (LSE:JD.) (3.7%), a retailer and distributor of branded sportswear and fashion wear within the consumer discretionary sector, and biotechnology product manufacturer and retailer Genus (LSE:GNS) (3.4%).  

The fund can invest up to 20% allocation outside the UK, currently 11%, and this is primarily made up of US tech stocks.

ESG focus

Environmental, social and governance (ESG) practices are implemented within the fund particularly through governance assessments, with a focus on sustainability and ethical behaviours, as well as participating in active engagement.

Performance

  24/04/2020 - 23/04/2021 24/04/2019 - 23/04/2020 24/04/2018 - 23/04/2019 24/04/2017 - 23/04/2018 24/04/2016 - 23/04/2017
Marlborough Multi-Cap Growth B Inc 40.45 -9.46 -0.48 19.49 20.43
IA UK All Companies 37.04 -19.17 2.46 8.02 16.26
FTSE AllSh TR GBP 27.58 -19.03 5.05 8.22 17.50

Source: Morningstar, Total Return GBP. 

The fund has performed extremely well over the long term, returning 82% over the past five years, in comparison to the 42% return from the IA UK All Companies Sector, which the fund uses as its benchmark. Over 12 months, the fund delivered a return of 41% in comparison to 37% for the IA UK All companies Sector. 

The recent cyclical rally was a headwind for the fund, evidenced by its six-month return underperforming the sector, up 15.2% versus 24.5%. However, the manager expects that over the longer term the effect will be minimal and believes the portfolio is well positioned going forward as Covid-19 restrictions begin to ease in the UK.

Why we recommend it

The fund features on the Super 60 list as a UK Equities, adventurous option. It has a strong long-term track record, due to its experienced fund manager and its investment process. As well as gaining from the expertise of the highly experienced manager, investing across the market-cap spectrum gives investors access to a broad range of opportunities within the UK. In addition, the fund is reasonably priced with an ongoing charges figure (OCF) of 0.81%.

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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