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Mid-cap fund management is an area where there is not a great deal of specialism. Perhaps the most famous is Andy Brough at Schroders.

However, entering the fray is a group which is quietly building a very creditable track record in many areas -Old Mutual.

OM is taking a slightly different approach than other funds. It is using two lead managers, Ashton Bradbury and Richard Moore. Ashton needs little introduction. His excellent small-cap record definitely speaks for itself. Richard is less well known but has a very good record managing UK equities at both National Mutual and Singer & Friedlander.

The purpose of using two fund managers is to utilise Ashton&#39s skills at the small-cap end and Richard&#39s expertise with the larger end of the mid-cap range – this sector ranges in size from £300m to £2.3 bn.

Mid-cap tends to show more similar characteristics with small cap than with large cap. It is more diversified and tends to be under-researched, meaning it is an area ripe for good stockpicking.

Flexibility is the key. Using the business-cycle approach rather than a pure value or growth play, in its opinion, gives the best results, as it combines topdown and bottom-up.

Stocks are selected using price/earnings ratios, earnings per share, earnings revision, cashflow, price to NAV, market cap to sales – to name but a few. A company that consistently has superior profit growth, positive earnings&#39 revision and a potential for re-rating is ideal. This fund has the potential to be top quartile.

Ben Yearsley is an investment manager at Hargreaves Lansdown

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