Investing against the grain takes “nerves of steel”, says Jeff Prestridge in The Mail on Sunday. However, a handful of so-called contrarian investors have made their clients good money by doing so. And it’s not just the likes of US investor Warren Buffett – there are also star contrarian fund managers to be found in Britain.
One such manager is Derek Stuart who has run the Artemis UK Special Situations Fund since 2000, and with co-manager Ruth Keattch since 2008. The fund, valued at £994.7m, aims to generate long-term capital growth by targeting so-called special situations – companies that are unloved by the market because they have undergone sudden changes, such as industry restructuring, managementchanges or are in a position to turn around their previous performance.
The fund’s recent record has been mixed. However, over ten years, Stuart has delivered an impressive return of 183%. “He has a knack of being ahead of the market through investing in out-of-favour areas,” Gavin Haynes, managing director of Whitechurch Securities, tells The Mail on Sunday. “Operating outside mainstream stocks, Derek Stuart is able to identify companies that are underresearched and provide good mis-pricing opportunities,” he adds.
Around 21% of the fund is invested in the industrial goods sector, while 16% is in oil and gas and 14% in healthcare. However, Stuart believes that a “renewed surge” in mergers and acquisitions (M&A) will drive returns over the next year, says Citywire. “M&A was at a low point going into 2012 but strong corporate cash flows are being put to work now,” he told the website.
Contact: 020-7399 6000
| Name of holding | % of assets |
|---|---|
| BP | 4.6% |
| BT | 4.4% |
| GlaxoSmithKline | 4.3% |
| Smith & Nephew | 3.5% |
| Micro Focus | 3.4% |
| ITV | 3.4% |
| Premier Oil | 3.3% |
| Melrose | 2.9% |
| Reed Elsevier | 2.8% |
| Devro | 2.8% |