The best fund to put in your Isa if you’re looking for capital growth is the M&G Recovery Fund, says Juliet Schooling Latter of Chelsea Financial Services in The Daily Telegraph. “This fund is loaded with strong ‘unloved’ companies that maintain good cash flows and strong balance sheets, but also offer the potential for significant recovery,” says Latter.
The fund has returned 58% over the past five years. That’s largely down to the skills of manager Tom Dobell. At the helm since April 2000, Dobell “was one of the first to see the storm clouds gathering before the crash”, says Latter. He managed to keep the fund in the top decile in 2008 when the market was going down, and did so again in 2009 when it was going up. That’s no mean feat.
Dobell favours a bottom-up, stock-picking approach and is happy to hold a diversified range of securities. Most share a common theme, though: they’re issued by firms that are out of favour, in difficulty, or whose growth prospects haven’t been recognised by the market. This fund differs from its peers in that Dobell prefers firms whose recovery potential is in their own hands rather than those that rely too heavily on a supportive economic background. This also means it can be quite contrarian at times.
Dobell “is a bit of a forgotten hero”, says Mark Dampier of Hargreaves Lansdown in The Times. “He takes a long-term view, buys stocks when they are unloved and holds them until they blossom again.”
The fund returned 89.8% between 2000 and 7 February this year against just 19% for the FTSE All Share index. So it’s a good one to buy and hold onto for the long term.
Contact: 0800-328 3191.
th {
background: #2b1083;
padding: 10px 5px;
color: white;
font-weight: bold;
text-align: center;
border-left: 1px solid #a6a6c9;
}
th.first {
border-left: 0;
padding: 5px 2px;
text-align: left;
}
tr {
background: #fff;
}
tr.alt {
background: #f6f5f9;
}
td {
padding: 5px 2px;
text-align: center;
border-left: 1px solid #a6a6c9;
color: #000;
vertical-align: center;
}
td.alt { background-color: #f6f5f9; }
td.bold { font-weight: bold; }
td.first {
border-left: 0;
text-align: left;
}
M&G Recovery Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Tullow Oil Plc | 6.1 |
| HSBC Holdings | 5.8 |
| Royal Dutch Shell B | 5.1 |
| GlaxoSmithKline | 5.0 |
| BP | 4.7 |
| Vodafone Group | 3.5 |
| Unilever | 3.2 |
| First Quantum Minerals | 2.6 |
| Invensys | 2.1 |
| National Grid | 2.1 |