When looking for investment ideas, it can pay to regularly monitor what companies’ leading fund managers are buying. With that in mind, here’s a look at three prominent UK fund managers who investors should keep an eye on.
Neil Woodford
Neil Woodford needs no introduction, as he is by far the most popular fund manager in Britain. While his performance in recent years hasn’t been amazing, Woodford’s long-term track record is excellent. Indeed, had you invested £10,000 with him when he started out in 1988, that investment would now be worth well over £300,000, according to analysis from Hargreaves Lansdown.
Unlike many portfolio managers, Woodford does not always invest with the ‘herd.’ He’s not afraid to follow his convictions, and this means that at times, his portfolio returns may differ from the index. One upside of this, is that his portfolios tend to shelter investors during market turbulence. For example, Hargreaves Lansdown believes he has captured 94.8% of the gains in months when the UK market has risen, but only 68.4% of the downside in months when the market has fallen.
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Woodford regularly publishes his portfolio holdings, and a glance through these could no doubt provide some interesting investment ideas. Having said that, it’s important to remember that, at times, even the best portfolio managers get calls wrong. This is illustrated by the fact that he currently has a large holding in Provident Financial, a stock that has recently fallen by around 80%.
Nick Train
Often referred to as ‘Britain’s Warren Buffett,’ Nick Train is another renowned UK fund manager, whose portfolios regularly appear at the top of the most popular mutual funds’ lists.
His investment strategy, like Buffett’s, is based around buying a concentrated portfolio of high-quality companies and holding them for the long term. Indeed, his global equity fund has 27 holdings, and his UK equity fund just 25. It’s a strategy that has served the portfolio manager well, with the Lindsell Train UK Equity fund returning almost 130% in the last five years alone.
Train seeks companies with strong brands and unique market positions, such as Diageo, Unilever and Relx. The UK portfolio is mainly invested across the consumer goods, consumer services and financials sectors and portfolio turnover is very low, minimising transactions costs.
Mark Slater
Lastly, for those with an interest in growth stocks, Mark Slater could be a good portfolio manager to watch closely. He has an outstanding long-term track record, and the MFM Slater Growth fund is the top performing UK equity fund over a 10-year period to the end of July, returning an impressive 267%, according to Citywire.co.uk.
This fund’s objective is to generate capital growth, and the portfolio manager looks to achieve this by investing in shares he believes are undervalued and have potential for a significant re-rating. Interesting names in the top 10 holdings at the end of June included First Derivatives, Restore and Paysafe Group. While the fund predominantly invests in UK companies, the portfolio manager is free to invest in international stocks. This portfolio certainly looks like one to watch for exciting growth opportunities.
