The Fund seeks to achieve long-term capital growth by investing primarily in companies deemed by the manager to have above average growth prospects.

The fund

  • Targets long-term capital growth.

  • Invests primarily in established UK companies.

  • Managed by a highly experienced team.

Meet the UK Equities team

Chris Rodgers
Chris Rodgers
Head of UK Equities
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Andrew Evans, CFA
Andrew Evans, CFA
Fund Manager
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Mark Boucher
Mark Boucher
Fund Manager
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Mark Swain
Mark Swain
Fund Manager
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Why invest in the fund?

  • High-conviction, active, growth portfolio taking advantage of thematic opportunities
  • Focussed on those companies best positioned or adapting to the modern economy
  • Avoiding mature or old economy business models
  • Co-managers have over 50 years’ combined experience of managing UK equities
  • Unconstrained by a benchmark with a pragmatic investment approach.

The UK Equity Growth Fund aims to produce long-term capital growth by targeting the most interesting companies where we believe growth is undervalued or underestimated.

Much of the UK market is weighed down by large constituents that are mature or ‘old economy’ businesses. However beneath the surface, the UK is home to some of the world’s best companies adapting & innovating in the new world. By clearly identifying the growth themes of the modern economy and investing in companies best place to take advantage we can maximise these opportunities.

Generating Alpha

Our knowledge and expertise of UK companies, management teams, analyst communities and the investor base lies at the heart of our ability to generate alpha. Analysing these constituents to best identify those companies that are most likely to produce positive earnings surprises and drive a re-rating of share prices is key to our investment process.

Our investment approach works because over the 20 years we have been active UK investors, we have built up a network of industry experts and sell-side contacts that sit alongside our own proprietary research enabling us to generate an abundance of high-quality and high-conviction investment ideas on an ongoing basis.

Superior idea generation and stock selection can be married with disciplined risk controls and portfolio exposure management to generate alpha.

Mark Swain, Fund Manager

Fund Commentary

October 2021


Market/macro backdrop
October saw a rally in UK equities with the MSCI UK index producing a sterling total return of 2.3% (Source: MSCI and Bloomberg). The ‘old economy’ areas of the market – particularly bank stocks – had a good month as ‘risk-free’ bond yields began to rise amid concerns that the Bank of England could be about to raise interest rates to mitigate inflation risks.

Performance
The Fund produced a performance of -0.2% in October (source: Morningstar – A Inc units).


Past performance is not a guide to future performance. Total return, NAV to NAV basis, net of charges.


Positive and negative contributors
Highlights over the month included our holding in Watches of Switzerland as it recovered strongly from the ‘growth’ sell-off at the end of September. Hydrogen plays have been buoyed by the growing realisation amongst many policymakers that time is running out if we are to avoid the worst effects of climate change, and this drove strong performance from our holding in Ceres Power. Structural growth holdings such as Ashtead also performed well.

The main stock level detractor over the month was S4 Capital after a broker downgraded it to hold. Future and Saietta, which had delivered stellar performance in prior months, also gave back some performance in October.

Significant portfolio changes - buy/sells 
Purchases in October included clothes retailer Next as the shares pulled back after the very impressive results the previous month. We funded this by selling JD Wetherspoon and builders’ merchant Travis Perkins, leaving our aggregate exposure to the UK consumer broadly the same.

Fund/corporate/team highlights
NA

Outlook
As we have discussed in our recent updates, the benefits of further economic recovery and global growth are now more finely balanced against the risks of higher valuations, tightening liquidity and rising inflation. The surge in wholesale energy prices will inevitably cause serious pain for some UK industries (particularly those that haven’t hedged their energy costs) and carries with it the risk of further supply chain disruption. Against this backdrop, we believe that astute security selection and in particular a focus on genuine structural growth opportunities and self-help will be an important driver of returns. We also think that it is important that investors realise that the pandemic continues to transform the UK economy and we will continue to reflect that reality within the composition of the Fund.
 

Explore the details
A high conviction, long-only UK equity fund with a growth style bias. Focused on growth themes & companies within the UK which are adapting to the modern economy.

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Fund Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets.

The Fund primarily invests in company shares listed on stock exchanges in the United Kingdom and will therefore have greater exposure to the market, political and economic risks in the UK.

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