JO Hambro CM UK Opportunities Y

Large and mid cap UK equity fund with a more defensive approach.

  • 135.50p
    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.

  • 171.40p
    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?

  • 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!

  • 0.63%
    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).

  • 0.70%
    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.

  • 3.20%
    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 15 January 2021, fund data last updated 11 December 2015

The fund targets long-term capital appreciation through investment in a concentrated portfolio of primarily large and mid-cap UK companies. Managers Rachel Reutter and Michael Ulrich first identify long-term economic trends, then picks out “quality” companies – well-managed businesses that deliver reliable growth – that will benefit from them. The managers look at valuations on an absolute rather than relative basis, and will increase the cash weighting if markets are expensive. Though income is not an explicit target, the fund typically has an attractive yield.

Fund summary

Sector UK All Companies
Structure OEIC
Launched January, 2013
Size £310m
Yield 3.20%
Charging basis Capital
Dividends paid 28 Feb

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.63%
Ongoing charges figure 0.70%

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Investment process

Following a recent retirement of the long standing lead manager John Wood, who has been running the fund since 2005, taking over lead management responsibilities are the alternate managers, Rachel Reutter and Michael Ulrich. With both Reutter and Ulrich having assumed their management responsibilities in 2015, the product continues to adhere its original philosophy and process and continues to focus primarily on FTSE 100 and FTSE 250 stocks. The first pillar of the process is to identify a number of long term macro-economic and industrial themes - these tend to be fairly stable over time. Following that, the focus is on identifying high quality businesses that will benefit from these themes, though ideas not linked to the themes may also be included in the portfolio. Quality companies are defined as those able to generate predictable and growing cash flows. Quality assessment involves looking at such factors as pricing power, volumes, management and appropriate levels of balance sheet leverage. Such is the discipline of the process that typically only about 60-70 stocks fit these selection criteria. These are then subjected to valuation control, which emphasises absolute rather than relative value - managers look for companies that can provide a strong absolute upside on a two to three year view. Focus is primarily on sustainable rather than one-off levels of three metrics in particular: return on equity, free cash flow and sales growth.

This is a core option for investors seeking predominantly large cap UK equity exposure. The strategy has a cautious approach, favouring stable, consistent companies and using cash where necessary which typically leads to low volatility compared to the UK stockmarket and an element of protection in falling markets. However, strong fundamental stockpicking skills mean the fund has still outperformed over the market cycle. Demanding selection criteria mean only strongest ideas are included in the portfolio, which will be focused as a result. The fund typically avoids financial and mining companies.

Manager research

Average monthly relative returns

  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.63%
  • 19/20 -0.43%
  • 20/21 0.52%

Bestinvest MRI

  • 3 years 0.24%
  • 5 years 0.00%
  • Career 0.12%
  • 3 years 84.40%
  • 5 years 0.00%
  • Career 74.20%

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

Rachel Reutter / Michael Ulrich

Michael Ulrich, Senior Fund Manager Michael co-manages the JOHCM UK Opportunities Fund alongside Rachel Reutter. Michael has been working on the UK Opportunities strategy since he joined JOHCM in 2015. Prior to joining JOHCM, Michael spent nine years at F&C where he built a strong track record as lead manager on a number of concentrated UK Equity portfolios. Before that he worked as an analyst and fund manager at Deutsche Asset Management. Michael holds an BA in Law and Politics and is a CFA Charterholder. Rachel Reutter, Senior Fund Manager Rachel co-manages the JOHCM UK Opportunities Fund alongside Michael Ulrich. Rachel has been working on the UK Opportunities strategy since she joined JOHCM in 2012. Prior to joining JOHCM, Rachel worked for Goldman Sachs where she was a Lead Sector Analyst in the Global Investment Research Division. Before that she worked as an Analyst at Oriel Securities and in Global Banking and Markets at RBS. Rachel holds an MA in Geography from The University of Oxford and is a CFA Charterholder.

Track record

Rachel Reutter / Michael Ulrich has 3.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.12%. During the worst period of relative performance (from September 2020 - November 2020) there was a decline of 6% relative to the index. The worst absolute loss has been 20%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 74%.

Periods of worst performance

Absolute -20.00% (December 2019 - March 2020)
Relative -6.00% (September 2020 - November 2020)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

3.5806% Serco Group Plc
3.5499% Glaxosmithkline
3.5429% Unilever
3.5201% Homeserve
3.4339% Reckitt Benckiser Group Plc
3.2254% Vodafone Group Plc
3.0988% Pz Cussons Plc
3.077% Smith & Nephew Plc
3.0715% Barrick Gold Corp
3.0625% Sse Plc
Source: Trustnet

Sector breakdown

Industrials 24.00%
Consumer Services 19.00%
Consumer Goods 15.00%
Money Market 12.00%
Health Care 9.00%
Basic Materials 8.00%
Utilities 6.00%
Telecommunications 3.00%
Technology 3.00%

Portfolio

20-40 stocks. Higher conviction stocks are weighted at 3-5%, with new positions starting at 1.5-2%.

Constraints

Up to 10% can be invested in overseas companies. Up to 33% may be held in cash.

Key Investor Information - Income

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Key Investor Information - Accumulation

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