Indeed, a large proportion of the fund is made up of Shapiro’s own money as well as those close to him. This is no bad thing for investors.
Shapiro follows closely Warren Buffett’s mantras when attempting to unearth value companies. Indeed, his investment philosophy could be loosely tied around the legendary investor’s most memorable quotes. This is also no bad thing for investors.
Like Buffett, the former man from Morley looks to invest in great businesses, earning good returns, available at attractive valuations. Underlying his stock selection are three precepts – quality, returns and value.
He thinks that UK household names, such as Tesco, have never been so attractively valued.
As well as food retailers, other areas that interest him are drinks manufacturers, pubs, asset management, recurring revenue plays, telecoms and distribution businesses.
He has steered away from banks, believing there are still too many unknowns, and is underweight in mining, pharmaceutical and oil companies.
His portfolio is concentrated (about 30 stocks) and looks at only the best ideas, unlike many other funds that doggedly obsess about the need to keep close to their benchmark index.
Shapiro currently has about 40 per cent in the FTSE 100 but spreads his portfolio across the market caps, with 40 per cent in the FTSE 250 and a further 20 per cent in smaller caps.
My only sticking point is the performance fees which have been applied to this fund – 20 per cent of any outperformance of the FTSE All Share. This is a disappointing trend that has become ever more common.
Darius McDermottis managing director of Chelsea Financial Services