Today, the value offered by the UK market creates an attractive opportunity for long-term investors. This fund focuses on valuation at the point of purchase and recognises that many of the best ideas are non-consensus.
This is a ‘best ideas’ portfolio of around 40-50 stocks. It is not constrained by a benchmark and invests only in those opportunities that look most compelling.
We seek out companies that are trading at attractive valuations. This is fundamental to our assessment of opportunity at every stage of the process.
Our UK equity professionals carry out 300+ company meetings per year. They actively exercise their voting rights and voted 100% of eligible ballots in 2024.
Our assessment of opportunity focuses on a company’s valuation. Every stock has to have a compelling valuation case before being included in the portfolio. We look at valuation through four lenses:
The next decade is going to look quite different to the one we have just lived through. On average, we believe it will be characterised by higher inflation and a higher cost of capital. There will be periods of volatility. However, historically, these sorts of environments have favoured ‘value’ over ‘growth’.
The UK equity market is more ‘value’ oriented than its international peers. The active positioning of the fund accentuates this value bias.
Martin Walker has 27 years of industry experience, and has managed this fund as a large cap, scalable, core value fund since 2008. Bethany Shard was appointed Deputy Manager of the fund in April 2023.
Martin Walker has been a fund manager since 1999 and Bethany Shard has been a deputy fund manager since 2023.
Valuation at the point of purchase is key. The best ideas are non-consensus.
Martin Walker
Fund Manager
The UK market offers access to a wide range of world class, cash-generative businesses. Furthermore, UK equities are currently undervalued as an asset class relative to international peers. They have endured headwinds for a number of years, firstly with Brexit, then the pandemic, and more recently from risk aversion across Europe as a result of war in Ukraine and conflict in the Middle East. The FTSE All-share index offers low correlation to US markets, but still has scale, breadth, and depth of companies. It offers something that is as different as it is attractive. And both these qualities are important.
The UK market derives about 25% of its revenues from the UK economy. In other words, it is a highly international equity market. This means that it is not as exposed to local economic headwinds as some other markets.
Furthermore, by virtue of the translation effect, weakness in sterling (especially relative to the US dollar and the euro) can offer a boost to UK equity market earnings. Bad news for the UK economy and sterling can be good news for UK equities, especially those that export goods and services or have substantial overseas operations.
ESG is integrated into all stages of our investment process. We recognise the importance of ESG factors as a source of opportunity for companies, as well as a potential source of risk. Furthermore, we believe in the importance of engagement and dialogue in bringing about positive change and generating better investment outcomes.
