We believe detailed research can identify skilful active fund managers capable of adding value over the longer term. We are patient, willing to consider all styles of investing, and mindful of that at times, and in certain asset classes active management does not offer value for money versus passive funds. The funds we choose are run by talented investors using rigorously applied investment processes.
- Our universe is Open-Ended funds (unit trusts and OEICs) that are dealt on a daily basis and investment trusts.
- Our specially designed screen to generate new ideas does not reveal the name of the fund – only its characteristics – in order to ensure we have no bias.
- We monitor each fund we are interested in as part of our sector-based monthly research cycle.
- Fund performance, style, risk and income are all considered alongside other issues such as inflows/outflows and any capacity constraints.
- We conduct around 300 face-to-face fund manager meetings a year.
- In-depth stock-by-stock performance analysis is undertaken before and after meetings.
- Comparison with peers, or passive alternatives.
- We wish to ensure our chosen funds excel in our three "P's": People, Process and Performance.
- We continually appraise risk, style, sustainability and governance, fees and operations.
- How experienced is the team or individual running the fund?
- Is the size and quality of the team appropriate for the fund? How does it compare with its competitors?
- Is there high turnover of staff running the fund – and if so, why?
- How is the fund manager incentivised? Are client interests aligned with fund manager incentives?
Philosophy & Process
- What does the manager believe drives asset price returns?
- Is the process repeatable, sustainable and applied consistently? What would make us change our mind?
- Does the manager have identifiable ‘skill’?
- What makes the approach better than those used by its competitors?
Performance, Risk & Style
- Is historic performance due to manager skill or exposure to a particular bias or style?
- Can it be earned at lower cost via a passive fund? Does active management work in this asset class?
- How does the manager think about and control risk in the fund? Is this approach appropriate?
- Can this fund perform well in the future? What will be the biggest impediment to its future success?
ESG & Operations
- Are ESG factors embedded in the investment process, or simply a box ticking exercise?
- Does this fund justify its fee level – and why?
- How liquid is the fund? Is it capacity constrained?
- If a closed-ended fund, how is it using their features for the benefit of shareholders?
- Each of our Foundation Portfolios features a range of funds selected from the Foundation Fundlist.
- Simple, economical 'starter' portfolios that may be suitable for various broad categories of investor.
- Can be purchased as a 'fund basket' through an ISA, Junior ISA, SIPP or Investment Account.
Rob and the Collectives Research Team are responsible for the Foundation Fundlist and Foundation Portfolios, with the Team undertaking active fund research for the firm. Rob has 20 years’ experience in Financial Services joining Charles Stanley from Hargreaves Lansdown in 2013 where he worked as a financial adviser and an investment analyst specialising in funds and collective investments.