IN THE BACK
FRANKLIN UK MANAGERS’ FOCUS FUND Peter Lowman, chief investment officer at Investment Quorum, explains why he has decided to buy a multi cap UK fund that has very much flown under the radar of most investors
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WHAT I BOUGHT LAST
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ast year was certainly a challenging one Franklin UK equity team, made up of Colin for UK equity investing, whether you Morton, Paul Spencer, Ben Russon, Richard were focused on large, mid or small caps. Bullas and Mark Hall. The portfolio tends The unforeseen collapse and continued fall to own 35 to 50 stocks, with each manager in the price of crude oil and commodities, choosing up to 10 of these. respectively, took its toll on sectors such as oil The team has an unconstrained approach, and gas, basic materials and industrials. seeking out attractively valued businesses Equally, the fall in energy prices at the right across the investment spectrum. Each petrol pump engineered an unexpected idea is bought with conviction and no transfer of income into the pocket of the man holding accounts for less than 1 per cent of on the street, which in turn had a positive assets. Although this is a focused investment effect on consumer spending. Elsewhere, approach, the managers still aim to achieve a sectors like healthcare and utilities were total return that exceeds that of the FTSE All favourably supported throughout 2014 due to Share index over the medium- to long-term, their defensive qualities and M&A activities. meaning three to five years. Concerns over economic growth within This fund’s track record shows it has already eurozone countries have also had an adverse delivered on its promises, but what we really effect on the UK, which is unsurprising given like about it is its pragmatic, common-sense they are our largest trade partners. Likewise, approach to investing and its experienced the unrelenting debate as to the expected fund management team, which is unified timing of the first interest rate hike in either through its managers’ ideas and researchthe US or UK has kept traders on edge in driven approach. recent months. In an investment environment where many These events and the forthcoming UK active managers have suffered from the recent general election in May 2015 will continue economic dilemmas, and extended period to raise some concerns about the UK stock of extreme central bank policies, it has been market; however, we would expect equities to refreshing to see that the managers have been deliver some modest returns, given that UK able to navigate a steady course through some inflation is likely to remain subdued, yields fairly choppy waters. on cash and bonds remain historically low, and the prospects of A STELLAR THREE YEARS some positive surprises 80% Franklin. UK Managers’ Focus A Acc in GB (75.58%) in corporate earnings are fairly high. 70% IA UK All Companies TR in GB (46.14%) Against this backdrop, 60% FTSE All Share TR in GB (37.27%) we have taken a 50% position in the Franklin 40% UK Managers’ Focus 30% fund, which offers 20% investors a pragmatic, common-sense 10% approach to capturing 0% large, mid and small cap -10% exposure. As its name suggests, the fund captures the Source: FE Analytics 05/01/2012 – 05/01/2015 best ideas from the