Bestinvest says
Formerly this fund had a large proportion of its assets in natural resources stocks, particularly oil companies. However, in recent years John Dodd (original manager) has reduced his involvement in the fund following Mark Niznik's introduction as co-manager in October 2007 and this led to less of a bias to Dodd's favoured sector. In February 2011 Niznik took full fund responsibility and has further reduced the portfolio's resources exposure, resulting in a more balanced fund. Note, however, the largest position in the portfolio remains in two unquoted resources stocks and whilst the manager is confident towards their prospects, we believe it to be an unnecessary risk. As such we are more cautious towards the fund and hence the rating remains as two stars.
Whilst the focus is on individual stock picking this will be balanced against the manager's view of the broad economic backdrop which can result in themes being evident across the portfolio. The managers' stock picking approach centres on investing in shares with scope for a re-rating. Typical investments are those companies where there is a clearly defined catalyst for change and earnings momentum. Other areas for analysis include directors' dealings and cross shareholdings, while strong management and financial integrity are key criteria for investments. The manager is sensitive to valuation and prefers to focus on companies with high free cash flow qualities and a PE ratio (multiple of its earnings in relation to its share price) in relation to its growth prospects. The manager changed in February 2011 and the once high weight in resources was cut significantly.