The best way to guard against any correction in the stockmarket is to go for “funds that are actively managed for their contrarian views”, says Philippa Gee of independent financial adviser Torquil Clark in The Daily Telegraph. By doing so “you are paying a fund manager to be choosy… and to take a different approach to the mass market”, she says. Gee recommends the New Star UK Special Situations fund, managed by James Ridgewell, “who is truly a law unto himself and refuses to take into account competitors’ views or the emotions of investing”.
Over the three years ending April 2006, Ridgewell’s fund would have turned £1,000 into £2,455 in the buoyant UK all companies sector, says Citywire.co.uk, compared to the sector’s average manager return of £1,869. In fact, it ranked eighth in a sector of 283 funds from January 2005 to January 2006, returning 29.9% against the sector average of 20.8%, says Nicola Cappin in The Independent. Despite recent falls in the market, Ridgewell remains bullish, believing it is merely a “small market adjustment” as the “fundamentals remain strong. For the long term, the market still represents good value,” he tells The Herald. He thinks there are opportunities in the FTSE 100, and that industrials such as ICI and media groups ITV and Reuters look good value, he tells The Observer.
At just 32 years of age, investors could be forgiven for thinking that their money would be better placed with a more experienced manager. On the contrary, he is one of New Stars’ “born stock pickers”, says Anna Bowes of Chase de Vere in The Mail.
Contact: 0845-608 8701
New Star UK Special Situations top ten holdings
Name of holding % of assets
New Star Asset Management Group 2.3%
Corus Group 1.5%
Accuma Group 1.4%
HSBC Holdings 1.4%
BAE Systems 1.4%
Cookson Group 1.4%
Anglo-Irish Bank Corp 1.4%
Charter 1.4%
Amvescap 1.3%
Accident Exchange Group 1.3%