Richard Buxton, manager of Schroder UK Alpha Plus enjoys more freedom than most fund managers. He isn’t “shackled by the constraints of investment benchmarks and can invest wherever he feels the best opportunities lie”, says Stephen Womack in The Mail on Sunday. He runs a concentrated portfolio and as a result the fund has been more volatile than the average UK All-Companies sector fund. Nonetheless, investors have been rewarded with top-quartile returns over three and five years.
At present Buxton holds just 39 stocks – a conventional equity fund would hold 50 to 100 – which are “slanted towards the consumer sector”. Holdings include the likes of Virgin Media and Burberry. British consumers may be under pressure, but “these businesses have strong balance sheets, experienced and cautious management teams and sustainable franchises – the key ingredients to survive the current tough times”, he says. By contrast the fund is underweight in the oil and gas sectors and financials. Buxton has shunned big blue chips, such as BP, Shell and HSBC, a decision that has caused the fund to lag behind rivals in recent months, says Womack.
However, “Buxton is a talented stock picker and while some of his decisions might take longer than others to deliver results, the fund has generated exceptional returns over the longer term”, says Mark Dampier of Hargreaves Lansdown. He has also “delivered outperformance in a variety of market conditions”. As such, “we have every confidence in his abilities as a manager and believe investors could well be rewarded over the long term”.
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Schroder UK Alpha Plus top ten holdings
| Name of holding | % of assets |
|---|---|
| Rio Tinto | 4.20% |
| Xstrata | 3.80% |
| Tate & Lyle | 3.60% |
| Virgin Media | 3.60% |
| GlaxoSmithKline | 3.50% |
| Burberry Group | 3.50% |
| BG Group | 3.30% |
| Misys | 3.30% |
| Shire | 3.30% |
| BHP Billiton | 3.30% |