Bestinvest says
The fund has a strong track record but was downgraded by Bestinvest after poor results during and after the banking crisis. The fund tends to outperform in directional markets but underperform at market turning points, and with the economic outlook still uncertain we have reservations over whether it can recapture its former glories.
The fund's aim is long-term capital growth from a diversified portfolio investing in any economic sector in any part of the world. The investment process is based around a quantitative filter known as SmartGARP, a daily process analysing over 100 items of company specific data for each stock, 36 macroeconomic data points and 28 separate sector weightings. The items are systematically split into seven factors the managers have identified as driving stock prices. At its core the fund looks for companies that are mispriced based on valuation and projected growth; another factor looks at quality of earnings. The process also includes earnings estimate revisions and macro-economic data to avoid stocks that are cheap for a reason. The final two factors include momentum and investor sentiment. These factors aid in market timing. The factors, equally weighted except for earnings revisions which are a double weight, are combined to give a score for over 6000 stocks. Though the process is primarily quantitative, the manager authenticates the SmartGARP data using such factors as a company’s news flow and will also take account of diversification in forming the portfolio.