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Alpha bets spell good returns

Chris Salih analyses core holding Schroder European alpha plus.

Schroder European alpha plus manager Leon Howard-Spink believes alpha is a misunderstood word in the investment community.

The former Jupiter manager says his portfolio is proof that alpha is not necessarily high risk and can be offered in tandem with low volatility and consistently good returns.

Howard-Spink says this system has enabled him to run money across the full gambit of market conditions in order to outperform his peers, as he diversifies across a range of drivers, whether they be geographical, market cap or a bias to growth or value.

He says: “The key is to account for all these factors to get momentum into your portfolios. Having the right companies does not necessarily mean following the index as it is the contrarian stocks that ensure you beat your peers.

“If you own traditional stocks such as Vodafone, HSBC and Glaxo, you will not struggle to perform but there is a need to be active to add to the offering as there are so many opportunities out there.”

Howard-Spink currently holds between 55 to 60 holdings, which he says is slightly higher than usual, with a turnover of around 20 stocks a year. The biggest holdings in what is a fairly well spread portfolio in terms of exposure include Vinci (2.9 per cent), Deutsche Boerse (2.8) and Anglo Irish Bank Corp (2.5).

He says: “Last year was fantastic for the fund but in 2007 my decisions have so far appeared to be a little cautious. But I have faith in my decisions and that I have invested in the right companies at the right time.

“Last year, some of my successes included a company that makes steel tubes, a plumbing group and another that makes bread. It is a diverse range and they all made little successes but it is those little successes that make a strong fund.”


Schroder European alpha plus Manager: Leon Howard Spink Fund size: £537.1m


Mark Dampier, head of research, Hargreaves Lansdown

“Howard Spink has done a cracking job at Jupiter and since he moved to Schroders at the back end of 2005 he has done a cracking job there too. It was a strange move from Jupiter but he has had the best of it so far with his career in fund management.”

John Davey, analyst, BestInvest

“A consistently good manager for a consistently good fund. Leon has outperformed in the short term and the long term and as a result he is our highest rated manager in Europe. He is big on European banks while he also has a strong-headed temperament when it comes to investing in conjunction with his analysts or not.”


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