With stock values starting to tick back up this week, investors should look to grab the best firms while they’re cheap rather than battening down the hatches and sticking with cash. That’s the view of fund managers such as Standard Life’s Ed Legget. He believes that now is a good time to look for bargains and take on extra equity risk.
Legget is manager of Standard Life Investment’s UK Equity Unconstrained Fund. This aggressive growth fund has an emphasis on mining, industrial engineering and energy. It’s been battered by the recent crash: it is down 21.8% over the last six months. But its longer-term record is much stronger – it has returned 3.6%, 41.7% and 51.3% over the past one, three and five years respectively.
Hargreaves Lansdown’s Rob Morgan is a fan. He says that although investing conditions might seem bad now, the fund’s team has been here before.
“Even in the darkest hours of the credit crunch in 2008 they felt the outlook for corporate earnings was positive and that recovery would be sharp. They were largely vindicated and, up until the recent market sell-off, performance has been exceptionally strong.” Bullish on industrial metals, Legget is heavily invested in miners such as Rio Tinto and Xstrata.
The unconstrained nature of the fund mandate won’t suit everyone – it allows Legget to “roam freely across the British stockmarket from large, blue-chip firms to higher-risk smaller companies”. For more adventurous investors, though, this is a great entry point into his team’s strong longer-term track record.
Contact: 0845-279 3003.
Standard Life Unconstrained Fund’s top ten holdings
| Name of holding | % of assets |
|---|---|
| GKN | 5.0 |
| Rio Tinto | 4.7 |
| Smiths (DS) | 4.6 |
| International Personal Finance Plc | 3.9 |
| Cookson Group | 3.9 |
| IMI | 3.8 |
| Vedanta Resources | 3.5 |
| Xstrata PLC | 3.5 |
| Galliford Try | 3.4 |
| Barclays | 3.3 |