Franklin UK Mid Cap A

A UK equity fund focused on FTSE 250 opportunities.

  • 734.97p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 4.50% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.50%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.58%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 2.00%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 13 December 2019, fund data last updated 04 June 2015

The fund invests in UK equities from the FTSE 250 ex investment trusts with the objective of outperforming this index over the medium to long term. Manager Paul Spencer uses a top-down view on companies and markets as a framework for bottom-up stock selection, in which he typically favours quality companies with attractive valuations and avoids those with unattractive risk/reward profiles. The portfolio is unconstrained and relatively focused at around 35-45 stocks.

Fund summary

Sector UK All Companies
Structure OEIC
Launched October, 2011
Size £1,100m
Yield 2.00%
Charging basis Income
Dividends paid 31 May, 30 Nov

Charges

Standard initial charge 4.50%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.58%

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Investment process

A broad top-down perspective on the outlook for economies and financial markets provides the framework for a bottom-up stock selection process. The investment universe is the FTSE 250 ex Investment Trusts - manager Paul Spencer has primary analytical responsibility for this section of the market, but works closely with his colleagues on the Franklin UK Equity Team. He favours companies with sustainable growth prospects, strong balance sheets and positive cash generation. Companies held by the fund will typically: 1. Operate in markets with secular growth; 2. Have scope for multiple expansion and a re-rating against the broader market; 3. Be able to provide positive earnings surprises and generate an upgrade in forecasts; 4. Have downside protection arising from rejected bids, cash balances or asset backing. Spencer actively screens out stocks which have weak balance sheets, are in sectors that are structurally challenged or whose management is believed to be unreliable. Once companies with attractive operating characteristics have been identified, they are valued using the team’s proprietary software.

This is a core rated fund for UK mid cap equity exposure. The fund's manager, Paul Spencer, has demonstrated that he is not only a skilled stockpicker but also adept at trading the portfolio when necessary. He successfully protected the portfolio by moving into defensive stocks ahead of the credit crunch in 2007/8, then rotated the portfolio into attractively valued opportunities which benefited from the subsequent rally. Mid-cap stocks tend to be more cyclical and therefore by nature more volatile than markets as a whole.

Manager research

Average monthly relative returns

  • 14/15 0.21%
  • 15/16 -0.51%
  • 16/17 0.31%
  • 17/18 0.10%
  • 18/19 0.74%

Bestinvest MRI

  • 3 years 0.38%
  • 5 years 0.17%
  • Career 0.23%
  • 3 years 97.90%
  • 5 years 90.30%
  • Career 99.80%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Paul Spencer

Spencer is a member of the Franklin UK Equity team, specialising in UK small and mid-cap analysis and investment. He began his investment career in 1987 as an analyst at BWD Rensburg. He became its head of research and from 1991 to 1995 he was the fund manager of the BWD UK Smaller Companies Trust. He moved to Granville Davies as an analyst in 1995 and then to TD Waterhouse in 1999 where he was head of research. He rejoined Rensburg as a fund manager in 2006. He joined Franklin Templeton in 2011 when it acquired Rensburg. Spencer graduated from Nottingham University in 1986 with a BA (Hons) and is a Fellow of the Securities Institute.

Track record

Paul Spencer has 13.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.23%. During the worst period of relative performance (from May 2015 - June 2016) there was a decline of 8% relative to the index. The worst absolute loss has been 38%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -38.00% (May 2007 - October 2008)
Relative -8.00% (May 2015 - June 2016)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 August 2019

5.19% Entertainment One Ltd
4.13% Spirent Communications
3.88% Paragon Banking Group Plc
3.72% Bellway
3.63% Intermediate Capital Group
3.6% Weir Group
3.46% Howden Joinery Group Plc
3.44% Derwent London Plc
3.4% Bodycote Plc
3.37% Lancashire Hldgs
Source: Trustnet

Sector breakdown

Industrials 35.00%
Financials 31.00%
Consumer Services 13.00%
Consumer Goods 9.00%
Cash & Cash Equivalents 5.00%
Technology 4.00%
Basic Materials 2.00%

Portfolio

35 to 45 stocks. Typical position sizes 1.5 to 5%.

Constraints

Minimum 80% in FTSE 250 stocks.

Key Investor Information

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