Recovery strategy
Fund manager: Tom Dobell
This strategy is the original recovery strategy that has been successfully investing in out-of-favour companies, with the potential to restore themselves to health, since its launch in 1969. A robust and consistent approach that has proved successful for over 47 years.
- This simple, repeatable common sense approach has a proven track record of generating substantial index-beating returns for our investors over the long term.
- M&G’s extensive experience in recovery investing is unique, successfully identifying the strategic value in companies shunned by the market.
- A clearly differentiated proposition, offering customers a strategy that is both genuinely long term and distinctly contrarian.
- Our highly active approach to company engagement is much enhanced by our unrivalled network of corporate contacts, providing a key advantage.
Smaller Companies strategy
Fund manager: Garfield Kiff
This strategy follows an actively managed, high conviction approach, investing in the bottom 10%, by market value, of the listed UK equity market. Company meetings and detailed financial analysis form the bedrock of the strategy’s bottom-up stock-picking approach.
- An investment process focused on the long term.
- We believe that the strength of a company’s business model together with effective management are the key to creating returns for shareholders.
- We are looking for companies with sustainable competitive advantage or undergoing positive change to achieve this.
- Management interaction is a core part of the process – we regularly meet all current or potential investments.
- We actively look to exploit features of the Small Cap market – such as short-termism, illiquidity and regular corporate actions – that create mis-pricing opportunities.
- We maintain a disciplined approach to valuation.
UK Select strategy
Fund manager: Rory Alexander
This strategy follows an unconstrained approach in UK equities with the aim of outperforming the FTSE All-Share Index over the long term. It applies a ‘growth and income’ approach without a yield constraint and focuses on companies with a sustainable competitive advantage that can re-invest their capital at high rates of return. Capital discipline is central to the stock selection process. As a result, it is essential that companies being considered for investment recognise the importance of dividends to ensure capital discipline within businesses.
The team seeks to invest in companies with potential for long-term dividend growth. This approach is based on the fundamental belief that companies generating rising dividends, bought at sensible valuations, will deliver excellent total returns over time through the combination of income growth and capital growth. Dividends and share prices go hand in hand.
The strategy is designed to benefit from the following:
- The tailwind of dividend investing.
- A bottom-up approach focused on fundamental analysis and valuation.
- A disciplined process which selects stocks from three distinct categories of dividend growth: ‘quality’ (defensives), ‘assets’ (cyclicals) and ‘rapid growth’ (growth).
The process provides flexibility and allows the fund manager to invest outside the defensive stocks most commonly associated with dividend strategies. The outcome is a balanced portfolio which is designed to cope with a variety of market conditions. The fund manager believes the strategy is best reflected in a concentrated portfolio of best ideas. The strategy will usually hold 30 to 40 stocks backed by conviction and a long-term time horizon of three to five years.
Dividend strategy
Fund manager: Phil Cliff
This strategy follows an unconstrained approach in UK equities with the aim of outperforming the FTSE All-Share Index over the long term. The strategy also has an income objective of providing a rising income stream and a yield premium.
The team seeks to invest in companies with potential for long-term dividend growth. This approach is based on the fundamental belief that companies generating rising dividends, bought at sensible valuations, will deliver excellent total returns over time through the combination of income growth and capital growth. Dividends and share prices go hand in hand.
The strategy is designed to benefit from the following:
- The tailwind of dividend investing.
- A bottom-up approach focused on fundamental analysis and valuation.
- A disciplined process which selects stocks from three distinct categories of dividend growth: ‘quality’ (defensives), ‘assets’ (cyclicals) and ‘rapid growth’ (growth).
The process provides flexibility and allows the fund manager to invest outside the defensive stocks most commonly associated with dividend strategies. The outcome is a balanced portfolio which is designed to cope with a variety of market conditions. The fund manager believes the strategy is best reflected in a concentrated portfolio of best ideas. The strategy will usually hold 30 to 50 stocks backed by conviction and a long-term time horizon of three years or more. Investors seeking income can receive distributions paid half-yearly.