River and Mercantile UK Recovery Fund B Inc

UK Growth

New for 2018. Buys shares at fire-sale prices

Hugh Sergeant, manager of R&M UK Equity Long Term Recovery since it launched in 2008, has an impressive track record over around three decades of investing.

As the name suggests, Sergeant, who is head of UK equities at River & Mercantile, looks for recovery stocks, where good businesses are currently experiencing below-normal profit levels that are depressing their valuations.

To warrant inclusion in the portfolio, a company must have capability to help itself out of this predicament; the manager will add to the fund's holdings at fire-sale prices in volatile times.

This increases the possibility of long term capital gains, as well as a performance profile that deviates significantly from the benchmark FTSE All-Share index.

The investment team has developed an individual philosophy and process called 'PVT': potential, value and timing. It is this quantitative process that underpins all of their investment choices. The portfolio has 230 holdings, which adds a large amount of diversification and reduces stock-specific risk. However, the nature of the fund is to find stocks that have been beaten up by the market and, therefore, sentiment could continue to go against them.

As a result, investors in this fund should expect to encounter a bumpy ride from time to time.

Narrative and ratings content all as of 01 January 2018.

See all Money Observer rated funds
Name
River and Mercantile UK Recovery Fund B Inc
Manager
River and Mercantile AM LLP
Type
Open Ended Investment Company
ISIN
GB00B614J053
Sector
UK All Companies
Launched
01/04/2009
OCF
1.12 %
Risk Rating
3
3 Year Sharpe
1.11
3 Year Alpha
3.59
Yield
1.9 %
Benchmark
FTSE AllSh TR GBP
The investment objective of the Fund is to achieve capital growth. The Fund will achieve its investment objective through investing in a portfolio which will primarily consist of UK equities that meet the manager's recovery criteria of a turnaround in company profitability over the longer term. The Fund will not be restricted by reference to a benchmark, sector constraints or company size. For these purposes UK equities includes, but are not limited to, equities listed in the UK, equities of companies domiciled in the UK and equities of companies which have substantial operating activities in the UK.
Holding %
HSBC Holdings PLC 4.97 %
BP PLC 4.02 %
Royal Dutch Shell PLC B 3.68 %
Standard Chartered PLC 2.53 %
Rio Tinto PLC 2.46 %
Lloyds Banking Group PLC 2.45 %
BHP Billiton PLC 2.27 %
GlaxoSmithKline PLC 2.11 %
Barclays PLC 1.70 %
Anglo American PLC 1.53 %
Region %
United Kingdom 76.58 %
Eurozone 6.58 %
Sector %
Financial Services 23.09 %
Energy 16.59 %
Basic materials 12.43 %
Industrials 11.19 %
Consumer Cyclical 9.47 %
Technology 8.86 %
Consumer Defensive 6.62 %
Healthcare 5.80 %
Name
River and Mercantile AM LLP
Address
EC2R 5AL, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Hugh Sergeant
Joined 04/01/2009

Hugh Sergeant graduated from the London School of Economics. He joined Gartmore in 1987 as a UK equity graduate trainee, researching a number of sectors and managing institutional funds before leaving to join Phillips & Drew in 1990. He became Head of Smaller Companies in 1997. In March 2000 Hugh was promoted to Head of UK equities and Chairman of the UK Equity Committee. Hugh joined SG Asset Management in October and is a member of the UK equity team.

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.