Merian North American Equity A

The fund is predominantly a US fund run on a quantitative basis.

  • 1227.00p
    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?

  • 4.00% 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!

  • 1.70%
    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).

  • 1.70%
    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.

  • 0.00%
    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 06 November 2015

The fund has a portfolio of predominantly large and mid-cap stocks offering core exposure to North American equities. It targets long-term capital growth through a diversified portfolio of typically around 200 securities. The investment strategy is based around a quantitative model which employs a blend of value, growth, momentum and quality. Factor exposures will vary over time depending on the prevailing market environment.

Fund summary

Sector North America
Structure OEIC
Launched April, 1985
Size £2,658m
Yield 0.00%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.70%
Ongoing charges figure 1.70%

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Investment process

The investment process is systematic and scalable. A quantitative model analyses over 1,400 companies to identify mispriced stocks. In 2009 the process was adapted and now accommodates the cyclicality of the model’s factors, flexing to take advantage of prevailing economic conditions. There is a strict risk discipline - the fund is monitored by independent risk professionals, reporting to the chief operating officer. OMGI’s quantitative strategy is driven by a model that is subject to ongoing enhancement by the quantitative strategies team. As such, the investment process is not vulnerable to the departure of any one individual.

The fund is run on a team basis by Ian Heslop, Amadeo Alentorn and Mike Servent who have worked together at Old Mutual since 2005. The investment process is completely automated, with computerised algorithms checking more than 1,400 companies against models to identify mispriced stocks. The process was enhanced post 2008 allowing the strategy to be more dynamic, such that prevailing market conditions and outlook could be incorporated, and investment returns have noticeably improved since.

Manager research

Average monthly relative returns

  • 14/15 0.29%
  • 15/16 0.05%
  • 16/17 0.44%
  • 17/18 0.09%
  • 18/19 -0.58%

Bestinvest MRI

  • 3 years -0.02%
  • 5 years 0.06%
  • Career 0.05%
  • 3 years 61.40%
  • 5 years 77.00%
  • Career 90.30%

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

Merian Quantitative Strategies Team

The team is managed by Ian Heslop as Head of Quantitative Strategies. He joined OMGI in 2000 and was previously at Barclays Global Investors. He has a BA in Chemistry from Oxford; a PhD in Chemistry from Edinburgh and is an Associate of the UK Society of Investment Professionals. Other members of the team include: Amadeo Alentorn, Head of Quantitative Research who joined OMGI in 2005 from the Bank of England; Mike Servent, Head of Quantitative Modelling & Systems, who joined OMGI in 2004 from BARRA and COR Risk Solutions; Yuangao Liu, Quantitative Analyst, who joined OMGI in 2007 from Jacobs UK; Lawrence Clarke, Quantitative Developer, who joined OMGI in 2006.

Track record

Merian Quantitative Strategies Team has 15.4 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.05%. During the worst period of relative performance (from April 2007 - August 2010) there was a decline of 20% relative to the index. The worst absolute loss has been 41%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 90%.

Periods of worst performance

Absolute -41.00% (May 2007 - February 2009)
Relative -20.00% (April 2007 - August 2010)

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 August 2019

4% Microsoft Corp
3.5% Apple Inc
2.7% Amazon.com Inc
2% Facebook Inc
2% Mastercard Inc
1.9% Procter & Gamble Company
1.8% Alphabet Inc
1.7% Visa Inc
1.5% Johnson & Johnson
1.5% Public Storage
Source: Trustnet

Sector breakdown

Information Technology 22.00%
Health Care 14.00%
Financials 14.00%
Communications 10.00%
Industrials 9.00%
Consumer Discretionary 8.00%
Consumer Staples 8.00%
Real Estate 5.00%
Energy 5.00%
Utilities 4.00%

Portfolio

c.200 holdings.

Constraints

Active Risk: 3 - 4%; Deviation relative to benchmark: Sector +/- 5%; Industry +/- 5%; Stock +/- 1%

Key Investor Information

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