ES R&M UK Recovery Fund B Inc

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Trading AccountISAJISASIPP

Fund Info

  • Yield History0.84%
  • 3 Year sharpe0.37
  • 3 Year alpha3.28
  • Distribution Typeincome
  • BenchmarkMSCI UK IMI NR GBP
  • Legal StructureOpen Ended Investment Company
  • Fund Size (month end)Open Ended Investment Company
  • OCF1.09%
  • IA SectorUK All Companies
  • Manager GroupEquity Trustees
  • DomicileUnited Kingdom
  • ISINGB00B614J053

Investment Strategy

The investment objective of the Fund is to grow the value of your investment (known as “capital growth”) in excess of the MSCI United Kingdom Investable Market Index (IMI) Net Total Return (the “Benchmark”) over a rolling 5 year period, after the deduction of all fees. The Fund seeks to achieve its investment objective by investing at least 60% of its value in shares of UK companies (companies which are domiciled, incorporated, or have significant operations in the UK). Investment can be direct, or indirect, in shares (including common and preference shares), rights for shares, warrants, depositary receipts (securities issued by banks that represent company shares), investment trusts (including REITS) and collective investment schemes.

ii Super 60 selected

This Fund is a member of our ii Super 60 rated list

This fund has a very well-diversified portfolio of almost 250 stocks, with one third of assets featuring in the largest constituents of the UK stock market. Hugh Sergeant, manager since its launch in 2008, has an impressive track record over three decades of investing.

The fund invests in recovery stocks – good businesses that are currently experiencing below-normal profit levels – which are depressing their valuations. To warrant inclusion in the portfolio, a company must have capabilities to help itself out of this predicament. Sergeant adds holdings at fire-sale prices in volatile times. This increases the possibility of long-term capital gains, as well as a performance profile that deviates significantly from the benchmark FTSE All-Share index.

Head of UK equities at River & Mercantile, Sergeant believes it is crucial to meet company management first to ensure they are the right people to set their company on the path to recovery. The investment team has developed an individual philosophy and process called PVT: potential, value and timing. It is this quantitative process that underpins their investment choices. The nature of the fund is to find stocks that have been beaten up by the market, so sentiment could continue to go against them. As a result, investors in this fund should expect to encounter a bumpy ride from time to time.

In August 2020 Sergeant argued 10 key tests have been passed for value to make a comeback. Read the article

September 2020

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