M&G Recovery gets a new manager

21 Sept 2020 - M&G has announced that Tom Dobell, manager of the M&G Recovery fund, will step down from his fund management responsibilities and leave M&G at the end of December. Michael Stiasny will take over the management of the M&G Recovery fund at that time.

Michael Stiasny has been at M&G for 20 years and will continue to manage his existing funds alongside the M&G Recovery fund.

Commenting on the change of manager, Darius McDermott, managing director of Chelsea Financial Services, said: “Tom has run this fund for the past 20 years – the first ten of which were very successful for investors as he made the most of the commodities boom.

“However, after the global financial crisis, the fund failed to adapt to the changing environment and, coupled with a style headwind, performance has suffered since. Many investors chose to invest elsewhere.

“Those that remain invested in the fund will now need to consider whether or not they stick with the new manager. While there will be no change to the investment process, Michael Stiasny will oversee a refreshed investment approach for the fund, with an increased focus on unloved medium-sized companies.

“It continues to be a challenging time for recovery investors and mid-caps in particular could feel the brunt of any Brexit bad news in the short term. But over the long term, I am still of the belief that the price you pay for shares in a company has an impact on future returns. Some investors may like to give the new manager the benefit of the doubt and see how he progresses. Others may prefer to put their faith in a more experienced multi-cap recovery manager.”

Four alternative recovery funds:

1. Schroder Recovery: this quietly aggressive, value-driven fund has been run by the same lead managers, Nick Kirrage and Kevin Murphy, since 2006, with a continuity of process and a very consistent track record. They invest in companies that have suffered a severe business or price setback, but where the managers believe long-term prospects are good.

2. JOHCM UK Dynamic: after more than 10 years in charge, manager Alex Saviddes has produced one of the most interesting multi-cap equity funds in the UK sector. He has a contrarian approach, looking for companies going through a period of change. He will use conviction when others are uncertain and, unusually for a fund focusing on capital growth, it produces a naturally good level of dividend yield.

3. Jupiter UK Special Situations: managed with a distinct contrarian and value-based approach, this fund offers investors access to a well-diversified portfolio. Ben Whitmore is hugely experienced and has had considerable success running this type of mandate throughout his career. He follows a methodical and well-defined investment philosophy, looking to buy stocks that are out-of-fashion with the market.

4. ES R&M UK Recovery: Manager Hugh Sergeant uses his three decades of investing experience to identify recovery stocks, where good businesses are currently experiencing below normal profit levels, which are depressing their valuations. If they have the capabilities to help themselves out of this predicament, Hugh will take them onboard. He will add to his holdings at almost fire-sale prices in volatile times and will be patient with their turnaround.

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Darius's views are his own and do not constitute financial advice.


Published on 21/09/2020