M&G Recovery A

Strong value, smaller stock bias and manager takes long term views.

  • 74.61p
    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.

  • 184.83p
    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!

  • 1.50%
    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).

  • 1.65%
    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.

  • 5.30%
    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 24 March 2020, fund data last updated 21 December 2015

The fund targets capital growth from investment in UK equities. Manager Tom Dobell takes a contrarian approach, looking for companies which are out of favour, in difficulty, or whose future prospects are unrecognised by the market provided the problems are deemed solvable. He typically holds stocks for a number of years, often building relationships with the boards, then sells when the company has regained stability. The portfolio includes businesses of all sizes, with typically around half in mid and small cap stocks and half in the FTSE 100.

Fund summary

Sector UK All Companies
Structure OEIC
Launched May, 1969
Size £1,926m
Yield 5.30%
Charging basis Income
Dividends paid 28 Feb, 31 Aug

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.50%
Ongoing charges figure 1.65%

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Investment process

The fund invests primarily in UK equities of all sizes, including those on the AiM market. Some overseas companies will also be included, though these are primarily London listed and Dobell prefers those with English-speaking management. He targets companies in operational or financial difficulty, those with new management, restructuring stories or those that are simply out of favour with the stockmarket. Ideas are identified through company meetings and visits as well as internal and external research. In valuing businesses the manager considers standardised metrics, but even these are often of less relevance as he often buys loss-making companies. He places greater emphasis on building relationships with company management, sometimes in conjunction with M&G’s in-house corporate finance team, and gaining an in-depth understanding of the business. Dobell cites a three-stage process from 'Unloved', to 'Stabilising' and to 'Recovering well', looking to invest at the initial stage through to recovery in a 3-5 year horizon.

This was once one of the top funds in the sector but performance has suffered in recent years. We first downgraded it in May 2012, following which the fund continued to suffer from poor stock selection and sector allocation. We believed investors' patience in expectation of a turnaround had been tested long enough and further downgraded the fund to a 1 star sell in September 2014.

Manager research

Average monthly relative returns

  • 15/16 -0.71%
  • 16/17 0.54%
  • 17/18 0.02%
  • 18/19 -0.27%
  • 19/20 -1.36%

Bestinvest MRI

  • 3 years -0.54%
  • 5 years -0.36%
  • Career 0.02%
  • 3 years 6.60%
  • 5 years 12.50%
  • Career 88.30%

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

Tom Dobell

Dobell is an investment manager in M&G’s UK Equity team. He joined M&G in 1992, having previously worked for Phillips & Drew (PDFM) with responsibility for their charity and small pension fund division. He graduated from Agricultural college in 1986.

Track record

Tom Dobell has 20 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.02%. During the worst period of relative performance (from February 2012 - February 2020) there was a decline of 37% relative to the index. The worst absolute loss has been 37%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 88%.

Periods of worst performance

Absolute -37.00% (October 2007 - February 2009)
Relative -37.00% (February 2012 - February 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

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Allocation

Proportion (%)

  • {{chartDataItem.text}}
    {{chartDataItem.value}}

Top 10 holdings

Data accurate as at 31 January 2020

7.9% Bp
6.9% Hsbc Hldgs
5.6% Mesoblast Ltd
4.1% Iwg Plc
3.8% Gw Pharmaceuticals
3.7% Lloyds Banking Group Plc
3.5% Oxford Biomedica Plc
2.9% National Grid
2.8% Rio Tinto
2.6% Kenmare Resources
Source: Trustnet

Sector breakdown

Industrials 22.00%
Health Care 18.00%
Financials 16.00%
Basic Materials 12.00%
Oil & Gas 11.00%
Consumer Services 10.00%
Utilities 3.00%
Technology 3.00%
Consumer Goods 2.00%
Telecommunications 2.00%

Portfolio

Around 100 stocks. Typically around 50% by value in the FTSE 100.

Constraints

The portfolio must hold at least 40% of its assets within the FTSE 100

Key Investor Information - Income

Download

Key Investor Information - Accumulation

Download