17 Jan 2022
Every month we study the universe of funds in the investment marketplace to assess whether they meet our exacting standards and should be given the RSMR seal of approval.
The Blue Whale Growth fund is a bottom-up stock picking fund. The team seek out companies that can grow significantly over time through reinvestment; companies that are resilient across economic cycles and that have a business model or growth strategy that is not easily disrupted. The fund seeks capital growth ahead of the IA Global sector and global indices. The teams in-depth fundamental analysis and financial modelling seeks out those companies that have high returns on invested capital and a company can reinvest these returns into further R&D or reward shareholders. There is a high bar to inclusion in the concentrated portfolio, which has 25-35 companies from across the globe.
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The Capital New Perspective Fund is a core equity fund looking for businesses which stand to gain from changing global trade patterns and multi-generational shifts in the global economy, seeking to invest in current and future global champions. To be eligible, a company must have at least 25% of revenue or assets outside its domestic market. Capital Group is a well-established leader in equity investing with a resource of over 400 investment professionals. The in-house analyst team is fully utilised resulting in a fundamentally driven bottom-up equity portfolio, with over 80 team members contributing to this strategy. The approach to portfolio construction combining an analyst Research Portfolio with seven other independently managed sleeves ensures strong stock diversification with close to 300 names held. Excellent and consistent returns have been driven by strong stock selection over many years.
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The fund offers investors a high alpha concentrated growth-orientated approach in Japanese equities, which is bottom-up driven and actively managed. Its focus is on long-term capital growth over 3-5 year periods. There is a fundamental research approach independent of the domestic economy in Japan, with the managers utilising their local on the ground presence to gain access to company management. The focus on secular growth companies avoids the economic malaise of the wider economy. Within the fund there is an emphasis on businesses with unique growth drivers that can deliver growth of 5-10% p.a. on a compound basis. The locally based team have delivered excellent results under this process and the fund compares well with other growth-orientated mandates.
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The Invesco Perpetual UK Smaller Companies Trust invests in a broad cross-section of small to medium-sized UK quoted companies. The team builds a portfolio of around 75 stocks from the bottom up, with c65% of the assets having an average market cap below £1bn. The managers have adopted a pragmatic common-sense approach, making long-term investments in companies with strong balance sheets that have attractive risk/reward profiles. The aim of the construction process is to maximise exposure to what they believe are the most attractive stocks and sectors, within a portfolio structure that reflects the managers' view of the macroeconomic environment. Portfolio construction is based on the outputs of their bottom-up stock research which in turn, is informed by the top-down macro views.
The performance track record is strong and the fund has a disciplined investment process which we feel leads to a strong case for inclusion in a portfolio.
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We continue to broaden our DFM research and have recently added James Hambro & Partners (JH&P). They are a limited liability partnership which is majority owned (c.88%) by members who currently work within the firm. With around £5bn in AUM, JH&P are one of the smaller DFMs that have national reach, however, they have all the structures in place that would be expected of a much larger firm and continue to grow the business in a steady, controlled fashion.
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