- Five-year returns more than double FTSE All-Share
- Invests in companies across the market cap spectrum
There are few UK evangelists quite like Keith Ashworth-Lord. The manager of the CFP SDL UK Buffettology Fund (GB00BF0LDZ31) used a recent interview with the Investors’ Chronicle to dismiss some of the bearish sentiment on domestic stocks as “an absolute load of trash”.
November rally aside, UK shares remains highly divisive. Yet SDL UK Buffettology is among the few funds to make impressive returns from the market in good times and bad. The fund generated an 80 per cent total return in the five years to 14 December, more than double that of the FTSE All-Share and the average UK equity growth fund. It has beaten the index in all but one full calendar year since its 2011 launch.
The fund’s manager operates using a philosophy known as business perspective investing, favouring companies with easy to understand business models, transparent financial statements, strong balance sheets and high returns on capital employed. This approach results in a highly concentrated portfolio of companies with growth narratives that show little dependence on the state of Brexit talks or other macro events.
The fund had just 32 holdings at the end of November, with big weightings to market darlings Games Workshop (GAW) and Liontrust Asset Management (LIO). Other holdings include Focusrite (TUNE), Jet2 (JET2), AB Dynamics (ABDP), London Stock Exchange (LSE) and Experian (EXPN).
Bar its relentless focus on sturdy business models, the fund appeals because of its exposure to different parts of the UK market. Its substantial size has limited the manager’s ability to buy the likes of small-caps, but otherwise Mr Ashworth-Lord insists this is a “waterfront” fund spanning the full market cap spectrum. The fund had 21.5 per cent of assets in FTSE 100 stocks at the end of November, with 27 per cent in FTSE 250 names, 13 per cent in small-caps and fledglings and 26 per cent in Aim. It had 6 per cent of assets in two S&P 500 stocks.
Any further asset growth for this £1.5bn fund will certainly be worth monitoring, and investors may favour other funds (including CFP SDL Free Spirit (GB00BYYQC271) which is run by the same management firm as CFP SDL UK Buffettology) for greater exposure to small-caps. The effect of diversification rules on the fund’s biggest bets should also not be discounted: UCITS requirements that no single position can make up 10 per cent or more of assets have recently forced the fund to trim its Games Workshop holding. But this fund continues to stand out as a disciplined, high-conviction play on the best of British.