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MERIAN UK ALPHA U1

MERIAN UK ALPHA U1 - Overview

Overview of MERIAN UK ALPHA U1 Buy in ISA Buy in Investment Account

The fund’s objective is capital growth by investing predominantly in listed UK equities from the FTSE 100 and FTSE 250 indices. Manager Richard Buxton has structured the fund to address a market environment where broad market advances might be difficult to achieve, and consequently selects a concentrated portfolio of stocks without any benchmark constraints. The bulk of performance is expected to be generated through bottom-up stock selection, though sector and thematic allocation will also affect the balance of the portfolio.

  • Standard Initial Charge 5.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector UK All Companies
Structure UNIT TRUST
Launched June, 2018
Size £1,861m
Yield 3.7%
Charging basis Capital
Dividends paid May, Nov

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.78%
Ongoing charges figure 0.78%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Information Investor Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

Richard Buxton is one of the few UK fund managers to have achieved success whilst investing predominantly in the FTSE 100, a notoriously hard area of the market to beat. He has outperformed over a long career at both Old Mutual and previous employers Schroders and Barings. He typically does better in rising markets and performance can be volatile. This has led critics to label him a bull market investor, an accusation we consider unfair given his pragmatic approach. We would argue periods of underperformance are generally more event specific than style driven.

Portfolio

Allocation Proportion(%)
Equity 98
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 2
Allocation Proportion(%)
UK 100
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0
Allocation Proportion(%)
Large Caps 72
Mid Caps 24
Small Caps 4
View all performance data for this fund

Investment process

The fund invests in a concentrated portfolio of large and mid-cap UK equities. The manager believes investors are too focused on short-term company news and economic indicators, and fail to properly consider companies’ long-term prospects. He targets companies with strong business models, healthy balance sheets and unrecognised potential. His investment style is pragmatic, so unrecognised potential can include turnaround situations, deep value stocks and more expensive growth stories where he believes they can maintain performance. New ideas can be prompted by factors including: absolute and relative valuations, persistent share price weakness, poor results, new management teams or changes in economic prospects. Stock research includes both quantitative and qualitative work. The former includes analysis of a company’s historical results and its competitive position using Porter’s Five Forces. The latter includes management track record, governance and incentive arrangements. Bottom-up research is complemented by the team’s thematic views. These will never solely dictate investment decisions - stocks must be supported by strong fundamentals in their own right. Portfolio turnover tends to be very low.

Live feed

Bid price(inc) 118.10p
Accum units 142.30p
Fund commentary 05/06/15
Fund data updated on 23/05/19

Asset allocation

Allocation Proportion(%)
Equity 98
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 2

Equity Geographic

Allocation Proportion(%)
UK 100
Europe 0
North America 0
Japan 0
Pacific 0
Emerging Markets 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 72
Mid Caps 24
Small Caps 4

Top 10 holdings

As at: 28/02/2019
5% Bp
4.3% Sage Group
4.2% Lloyds Banking Group Plc
4.1% Glaxosmithkline
4.1% Hsbc Hldgs
4% Whitbread
3.9% Tesco
3.9% Ssp Group Plc
3.8% Royal Dutch Shell
3.7% Worldpay Inc
Source: Trustnet

Sector breakdown

Financials 22%
Consumer Discretionary 20%
Materials 11%
Health Care 10%
Information Technology 10%
Energy 9%
Industrials 7%
Consumer Staples 6%
Utilities 3%
Communications 2%

Portfolio details

30-40 stocks. The majority of stocks are in the FTSE 100 (70-75%) with the balance in the FTSE 250.

Constraints

Typical max 5% in one stock. Up to 20% in cash.
The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
14/15 15/16 16/17 17/18 18/19   3 years 5 years Career 3 years 5 years Career
0.11% -0.51% 0.05% 0.10%   0.18% 99.70%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Richard Buxton

Manager. Buxton joined Old Mutual in June 2013 as head of UK equities and became chief executive in July 2015. He has a degree in English from Oxford University and began his investment career in 1985 with Brown Shipley Asset Management as a fixed income and equity investment manager. He moved to GRE Asset Management in 1989 as a UK equity manager. In 1990 he joined Baring Asset Management as a UK equity manager. He moved to Schroders in September 2001 to run the specialist UK equity team and became its head of UK equities in 2003.

Track record

Richard Buxton has 22.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.18%. During the worst period of relative performance (from July 2007 - January 2009) there was a decline of 15% relative to the index. The worst absolute loss has been 46%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance
Absolute -46% (October 2007 - February 2009)
Relative -15% (July 2007 - January 2009)

Other funds managed

  Start Date
MERIAN UK ALPHA RJun 2018
MERIAN UK EQUITY AJan 2019

Sector record since November 1995 (22 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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