New Star Investment Funds has made the New Star UK special situations fund available to retail investors now the fund has built up a three-year institutional track record.
This Oeic is managed by James Ridgewell who joined New Star Institutional Managers - formerly WorldInvest - in 1999. Ridgewell took over the management of the fund in May 2003 from Guy de Blonay, who now runs the New Star global financials fund. Previously Ridgewell worked as an equity analyst at Abbey Life Investment Services.
The fund currently has 85 holdings within companies of all sizes. Large caps currently account for just over 38 per cent of the portfolio and almost 35 per cent goes into small caps and unlisted companies, with the remainder in mid caps.
When selecting stocks for the fund Ridgewell will look for factors specific to each company that other fund managers may have missed or have chosen to ignore, but where he sees a good investment opportunity. For example, a company may be undervalued or undergoing a restructure to make it more efficient and increase potential earnings.
Ridgewell likes to meet as many of the management teams of these companies as he can, especially smaller companies and those that are less researched.
The UK economy looks strong relative to other European economies, but some stock valuations already reflect this and have limited scope for further growth. Ridgewell will need to weed out the high valuations and stocks which do not look promising even though they are cheap.
With the multi-cap approach Ridgewell has the ability to go wherever good value is found. However, the risk profile of the fund may shift as the fund increases or reduces its smaller company holdings and this is something investors will need to understand.
According to Standard & Poor's the New Star UK special situations fund is ranked eighth out of 241 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to May 10, 2004.