Share prices can fall for many valid reasons. But some “suffer unfairly”, says Stephen Womack in The Mail on Sunday. That’s either because an entire sector becomes unpopular, or because investors don’t look beyond the obvious. This is where Henry Dixon, manager of Matterley Undervalued Assets Fund, comes into his element.
Henry Dixon’s team monitor the entire FTSE 350 and use mathematical models to draw up a shortlist of firms they think may be undervalued. What they believe are unfairly priced stocks are then added to the fund’s portfolio. Dixon’s strategy has won the fund a spot in the top 10% of the “highly competitive” UK All Companies sector.
The fund launched in 2008 after Dixon helped create boutique fund manager Matterley after leaving New Star. Since then it has returned 39.4% compared to a FTSE All-Share total return of 25.3%.
Dixon likes house builder and contractor Galliford Try, which trades below its book value. “In the downturn, it was prudent, buying land for new build at great prices. Developing these plots should release good returns in the years ahead.”
The fund has benefited from holding Belgian chemicals firm Solvay, which recently bought Rhodia, a French group with “complementary operations”. The case for acquisitions “isn’t difficult to generate for cash-rich firms at the moment when cash, as any saver will tell you, earns nothing at the bank”, says Dixon. The fund yields just 1.96%, not surprising given its focus on out-of-favour stocks.
Contact: 0844-9310 031.
Matterley Undervalued Assets top ten holdings
| Name of holding | % of assets |
|---|---|
| Royal Dutch Shell | 4.7% |
| AstraZeneca | 4.5% |
| Rio Tinto | 3.5% |
| Vodafone | 3.4% |
| BP | 3.0% |
| Dragon Oil | 2.7% |
| Schroders PLC NV | 2.6% |
| Aer Lingus | 2.3% |
| GKN | 2.2% |
| Wm Morrison | 2.1% |