Graham French has been working for M&G Investments for 21 years. For the last 15 years he has managed the M&G Global Basics Fund, which has delivered 59.2% over the last five years, compared to the sector average return of 20.9%. The fund’s aim is to provide long-term capital growth from international companies that can capitalise on market trends.
The key to his success is that he looks for companies in the West that form the “building blocks” of the global economy. Firms that have the “size, skills or expertise to capitalise on trends such as the rise of emerging markets”, says Richard Troue of Hargreaves Lansdown. For example, as emerging nations develop they need to invest ever-increasing amounts in their infrastructure. This means that they need energy and raw materials driving up the prices of both. To capitalise on this, French has invested in Tullow Oil and French mining firm Eramet, which could both “benefit significantly from this trend over the long term”.
In order to spread the risk beyond emerging markets French also looks for companies that have a global presence that can thrive whatever the global economy is doing. He also likes gold as an investment, gaining exposure through miners such as Hochschild Mining.
The fund’s broad spectrum of investments, which includes everything from miners to soap-makers, appeals to Brian Dennehy. The managing director of adviser Dennehy Weller and Co recommended the fund in The Independent, as it is “taking advantage of the economic shift from West to East”.
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M&G Global Basics Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Fraser & Neave | 5.6 |
| Tullow Oil | 3.9 |
| Ansell | 3.4 |
| Unilever | 3.4 |
| Lonmin | 3.3 |
| Eramet | 3.1 |
| Imerys SA | 3.1 |
| Colgate-Palmolive Co | 2.9 |
| Kerry Group | 2.9 |
| Symrise AG | 2.9 |