Brown Shipley has introduced the Solus UK Flagship Fund, an Oeic which aims for growth and income by investing in UK companies.
The new fund is a replacement for the five smaller Brown Shipley UK funds that were closed last November - income portfolio, growth portfolio, balanced portfolio, UK equity income and UK growth. It is benchmarked against the FSTE All Share Index and will hold undervalued stocks in all sectors. It is managed by Paul Morgan, who also runs the Solus UK special situations fund.
Morgan joined the group in March 2001 as an equity analyst specialising in the UK market. Prior to this he was a fund and private client manager at an asset management company in York, where he helped set up the CF London York UK equity & income, select income and global growth unit trusts.
Morgan will work closely with Paul Harwood, former managing director of Merrill Lynch - now investment research consultant and member of Brown Shipley's investment policy committee. The IPC sets Brown Shipley's investment framework, which incorporates the house view of the global economy..
The UK flagship fund will invest in companies that have a good management team, a strong market position, good growth prospects and strong cash flow. Companies which benefit from high barriers to entry, making it is difficult for a new entrant to compete, will also be in a strong position to make it into the portfolio.
With the UK economy having moved through the first stage of a recovery, as indicated by an increase in interest rates, the mood is positive for UK equities but valuation and earnings growth are the deciding factors in how it will progress. Morgan and his team will need to ensure the portfolio contains undervalued stocks which realise the anticipated earnings growth.
The main problem this fund will have is that there are many well-established funds exploring the same patch and Brown Shipley 's Solus UK flagship fund may suffer from a lack of name awareness and a track record.