View more on these topics

Mutual respect

Old Mutual has attracted another top fund manager, Simon Murphy, ex-M&G, who has recently taken over the management of the Old Mutual UK select equity fund.

While he was managing the M&G UK growth fund from April 2004 to November 2007, the fund delivered returns to investors of 74.7 per cent against an average return of 57.8 per cent for the peer group.

Murphy has entirely revamped the portfolio and has trimmed it down to about 40 stocks.

While the stockmarket is likely to continue on a rollercoaster ride, I believe it is much more sensible to stay in the market, particularly as it is still well below its high, and invest with good managers such as Murphy.

He believes, quite rightly, that corporate balance sheets remain generally healthy and are supported by good dividend growth and are now at sensible valuation levels across much of the market. Recent cuts in interest rates will help, too.

Murphy is currently positive on oil and gas and basic material stocks, where he invested almost a third of the fund, and prefers oil services to oil majors. The fund is also overweight in support services and defence which have sufficiently strong pricing power to continue to grow earnings and dividends in an economic slowdown.

He is much underweight in sectors affected by the credit crunch such as consumer services, housebuilders, retail and most financials but some such as Intermediate Capital, a medium-sized finance and fund management group, as well as leading alternative investment provider Man Group and Royal Sun Alliance are attractive at current levels.

I believe that this fund should be a top performer over the next year or two and I recommend it for all growth investors.

Recommended

Baltic fund aims for 15% return

Stellar Asset Management’s first fund, Baltic States, focuses on Eastern Europe opportunities, looking for annual total returns to investors of 15 per cent. Minimum investment is £25,000.

A&L introduces LTV pricing

Alliance & Leicester has become the latest lender to introduce loan to value pricing across its whole range of prime residential mortgages.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com