MI Chelverton UK Equity Growth Fund B Accumulation shares

UK Growth

Rated Fund 2018-19. Backs cash-generative smaller companies

Like other Chelverton Asset Management funds, MI Chelverton UK Equity Growth invests in companies that are listed in the UK but fall outside the FTSE 100 index. It has been managed since inception by James Baker, who joined Chelverton in 2014 to run the fund. He has more than 30 years of equity market experience, specialising throughout his career in UK small and medium company stock selection. He was joined in 2016 by assistant fund manager Edward Booth.

They aim to deliver long-term capital growth to investors by investing in small and medium-sized companies that are highly cash-generative and can therefore fund their own growth. They look for companies with strong market positions that are expected to grow faster than the UK economy. Typically, they will have some form of sustainable competitive advantage, such as a unique product or a dominant position in a particular market.

The managers’ starting point is to quantitatively screen their universe of 1,200 stocks. To warrant further consideration, a company must be able to convert 75% of operating profit into free cash flow from gross margins higher than 20%. They also test companies’ balance sheets to see that debt is not too burdensome and that the amount of working capital is not excessively high. This generates around 150 ideas for further assessment involving a more in-depth analysis of sales, customer base and margins, and around half of these make it into the portfolio.

The managers have significantly reduced their exposure to technology over the past year, from more than half to less than a quarter of the portfolio.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
MI Chelverton UK Equity Growth Fund B Accumulation shares
Manager
Maitland Institutional Services Ltd.
Type
Open Ended Investment Company
ISIN
GB00BP855B75
Sector
UK All Companies
Launched
20/10/2014
OCF
1 %
Risk Rating
3
3 Year Sharpe
1.35
3 Year Alpha
10.79
Yield
1 %
Benchmark
IA UK All Companies Sector
The investment objective of the Fund is to achieve long-term capital growth by investing primarily in a portfolio of fully listed and AIM traded UK small and medium sized market capitalised companies equities.
Holding %
Future PLC 2.48 %
Clinigen Group PLC 2.04 %
Strix Group PLC 1.94 %
Restore PLC 1.88 %
Tarsus Group PLC 1.84 %
Alliance Pharma PLC 1.73 %
Volution Group PLC 1.68 %
Castleton Technology PLC 1.63 %
Euromoney Institutional Investor PLC 1.63 %
XPS Pensions Group PLC 1.62 %
Region %
United Kingdom 93.99 %
Sector %
Technology 31.40 %
Industrials 17.28 %
Consumer Cyclical 14.42 %
Financial Services 10.78 %
Healthcare 10.33 %
Basic materials 8.39 %
Name
Maitland Institutional Services Ltd.
Address
London, United Kingdom
Legal Structure
Open Ended Investment Company

Data provided by Morningstar.

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