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‘Meetings will pay dividends’

Lawrence House Financial says multi-managers who rely on published research more than face-to-face meetings with managers risk missing good investment opportunities.

The company runs its multi-manager funds by selecting funds that have fallen out of favour or are outside the mainstream. It says multi-managers should look beyond performance figures because there may be catalysts for change not reflected in market views.

Fund manager Alan Stokes recently added the M&G dividend fund to the Lawrence House equity income fund after a meeting with fund manager Richard Hughes. Stokes had been watching the fund but, as the existing funds in his portfolio were performing well, an inflow of new money was required before he could buy it. In 2000, the fund’s focus switched from yield to capital but a dividend policy was later reinstated. Stokes says he now looks more closely at income quality.

Last year, Stokes invested in Marlborough UK equity income when manager Greg Bennet had just taken over and performance was disappointing. A meeting with the manager prompted Stokes to invest and the fund has since recovered.

Stokes has also looked outside the UK equity income sector to invest in Rathbone income and growth, which falls in the UK all companies sector. He says meeting manager Julian Chillingworth was vital in understanding how the fund had achieved its unbroken track record of dividend payments over several years.

Stokes says: “We do get managers to fill in forms but I prefer the old-fashioned thing of going along to see managers with a proven track record. The point about the Marlborough fund is if we had taken a view based on the forms and performance, we would not have looked at the catalyst for change.”


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