MI Chelverton UK Equity Growth Fund B Accumulation shares

UK Smaller Companies

Rated Fund 2018-20. Backs cash-generative smaller companies

MI Chelverton UK Equity Growth, a newcomer to Money Observer's awards in 2019, was commended in the UK Growth category for its consistent ranking in the first quartile of its peer group. It is one of three funds moved into UK Smaller Companies from our UK Growth asset group for 2020, on account of their bias towards small and medium-sized firms.

It has been managed since inception by experienced smaller companies stockpicker James Baker, who joined Chelverton in 2014 to run the fund. He was joined in 2016 by assistant fund manager Edward Booth. The pair aim to deliver long-term capital growth to investors by investing in 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, firms will have some form of sustainable competitive advantage, such as a unique product or 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%. The managers also test companies' balance sheets to see that debt is not too burdensome and that working capital is not too high. This generates around 150 ideas for further assessment - a more in-depth analysis of sales, customer base and margins. Around half of these make it into the portfolio. The managers significantly reduced their exposure to technology in 2018, from more than half the portfolio to 28% at present.

Narrative and ratings content all as of January 2020. 

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
0.94 %
Risk Rating
3
3 Year Sharpe
0.50
3 Year Alpha
13.29
Yield
1.3 %
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 %
Clinigen Group PLC 2.36 %
Future PLC 2.23 %
dotDigital Group PLC 1.67 %
Diversified Gas & Oil PLC 1.62 %
Alliance Pharma PLC 1.50 %
Volution Group PLC 1.50 %
Synthomer PLC 1.47 %
CentralNic Group PLC 1.46 %
Restore PLC 1.43 %
IMImobile PLC 1.43 %
Region %
United Kingdom 91.68 %
United States 5.15 %
Sector %
Industrials 23.66 %
Technology 21.67 %
Healthcare 15.63 %
Communication Services 11.37 %
Financial Services 10.45 %
Consumer Cyclical 6.39 %
Name
Maitland Institutional Services Ltd.
Address
London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Edward Booth
Joined 10/20/2014

Edward Booth, graduated from the London School of Economics with a degree in Economics with Economic History, and qualified as a Chartered Accountant at Deloitte, where he focused on the Insurance sector. Prior to joining Chelverton, he worked as a Business Analyst for Barclays, focusing on a number of areas including Investment Bank Revenue and Group Capital performance.

James Baker
Joined 10/20/2014

James Baker, a history graduate from Cambridge University, has over 30 years of equity market experience on both buy and sell sides, specialising for all of his career in UK Small and Mid caps stock selection. He has worked for several organisations over the years, but most notably spent 11 years from 1999 to 2011 as part of the ABN Amro, Small Mid cap sales team, which was consistently top ranked by Extel. Prior to joining Chelverton he worked as the Assistant fund manager on the Rathbone UK Recovery Fund.

Data provided by Morningstar.

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