Merian UK Mid Cap Fund R GBP Acc

UK Growth

Rated Fund 2017-19. Takes a flexible approach through the economic cycle

Merian UK Mid Cap was renamed during 2018 to reflect the rebranding of Old Mutual Global Investors. The fund has grown in size to £3.3 billion under the successful stewardship of Richard Watts.

A “thoughtful investor”, according to Morningstar, Watts has run the fund since 2008 with a focus on medium-sized UK companies – often the frontrunners in the growth stakes. More recently, he has started to buy stakes in private, unlisted companies.

Barclays Wealth and Investments points out that the fund has endured a “really difficult time”, owing to its significant weighting in smaller companies, among the hardest hit in the recent stockmarket rout. However, its strong longer-term performance has been driven by high-growth names such as online fashion retailer Boohoo.

Watts believes a flexible style, encompassing a willingness to hold value and/or growth stocks, depending on the conditions and outlook, provides the greatest scope for sustained outperformance.

He and the rest of the UK small- and midcap equities team first look to identify sectors likely to outperform the overall economy. They study a wide range of economic and social indicators across the domestic and global scene. This allows Watts to set the overall balance of the portfolio: its defensive or cyclical positioning, for example.

When selecting companies to be included in the portfolio, Watts expects firms to meet at least one of three selection criteria: a likelihood that earnings will be revised upwards; re-rating potential; or sustained above-average earnings growth. Each week the team produces a screen of data for all companies in the mid-cap universe.

Meetings with company managements are an important part of the fund’s investment process. Watts and his team typically conduct around 300-400 meetings a year.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Merian UK Mid Cap Fund R GBP Acc
Manager
Merian Investment Management Limited
Type
Open Ended Investment Company
ISIN
GB00B1XG9482
Sector
UK All Companies
Launched
18/05/2012
OCF
0.85 %
Risk Rating
5
3 Year Sharpe
0.57
3 Year Alpha
-1.45
Yield
1.1 %
Benchmark
FTSE 250 Ex Investment Trust TR GBP
The fund aims to achieve capital growth. In seeking to achieve its investment objective the fund will aim to deliver a return, net of fees, greater than that of the FTSE 250 ex Investment Trust Index over rolling 3 year periods. The fund primarily invests in a portfolio of medium sized UK companies.
Holding %
Boohoo Group PLC 9.01 %
Ascential PLC 6.05 %
Ashtead Group PLC 5.22 %
SSP Group PLC 5.12 %
Rentokil Initial PLC 4.47 %
Homeserve PLC 4.34 %
Workspace Group PLC 4.15 %
GVC Holdings PLC 3.65 %
JD Sports Fashion PLC 3.37 %
The Hut Group 3.00 %
Region %
United Kingdom 100.00 %
Sector %
Consumer Cyclical 37.29 %
Industrials 23.44 %
Real Estate 13.97 %
Financial Services 11.94 %
Technology 5.84 %
Name
Merian Investment Management Limited
Address
EC4P 4GG, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Richard Watts
Joined 12/31/2008

Richard joined Merian in 2002, initially as an analyst for the UK mid- and small cap team before assuming full portfolio management in 2009. The Merian Chrysalis Investment Company Limited was listed on the London Stock Exchange in October 2018, with Richard as co-manager. He joined Merian from Orbis Investment Advisory where he spent two years as an equity analyst, before which he was a senior associate in the investment management division of PriceWaterhouseCoopers. Richard has a degree in mathematical sciences from the University of Oxford, is IIMR qualified and is a CFA charterholder.

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.