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ii Super 60 - Merian North American Equity

ii Super 60 investments:
Merian North American Equity

Asset Group Asset Sub-Group Investment Category
Equities US equities Core

Selection rationale:
This fund was renamed in 2018 to reflect the rebranding of Old Mutual Global Investors, but Merian North American Equity’s well-defined investment process has remained the same: the managers ‘follow the money’ – ascertaining what type of stocks other investors are buying and then buying the best ones in those categories.

Perhaps unsurprisingly, such a strategy was expensive and difficult to achieve amid a rockier road for the US market in 2018. That is likely to persist while volatility remains elevated, but we continue to recommend this fund for its momentum driven strategy.

A three-man management team consisting of Ian Heslop, Amadeo Alentorn and Mike Servent have been at the helm of the fund since 2004. The team’s approach is to assess companies against criteria including stock price valuation, balance sheet quality, growth characteristics, efficient use of capital, analyst sentiment and supportive market trends. These characteristics are analysed to produce a single return forecast for each stock.

They then build a diversified portfolio of mainly larger company shares that is expected to outperform in the current economic environment. How the characteristics of stocks are weighted depends on historical factors and prevailing conditions. Weightings are therefore dynamic, tilting the portfolio towards the characteristics that are likely to be most effective at the time.

An advantage of this approach is that because the managers do not follow a rigid investment style, they do not exclude any stocks as style-oriented investment managers do and can invest in any type of stock provided it is deemed appropriate by their system.

The fund won Money Observer’s Best North America Fund award in 2013 and 2014 and was highly commended in 2016.

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The information we provide in the Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. None of the opinions provided are a “personal recommendation”, therefore you should ensure that any investment decisions you make are suitable for your personal circumstances. Past performance of the underlying constituents is not a guarantee of future performance. Remember, the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.

Risk warnings

Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab. 

The information we provide in the ii Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor. 

Any changes to the ii Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii Super 60 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii Super 60 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii Super 60 investments list.