When I tell people that I work in financial services, I often wince. And that grimace can turn into a frown when I take it one step further and say I’m involved in fund management.

Sadly, the industry I love has been tarnished by a few bad eggs and crises and the assumption is that we are all * beep * looking for number one investment bankers.

But this is not the case. While I have met a few of these characters in my 20 years of fundraising (you will have to wait for my memoir to find out more), I have met many more who simply love their work and are excited to find the best companies and make money for their investors.

With that in mind, this review considers the fund to whose manager I and other colleagues have entrusted the financial future of our own children.

Rathbone Global Opportunities has been a favorite of mine for almost two decades and has been one of my children’s Junior Isas.

He invests in companies around the world and has been led by manager James Thomson since November 2003. During his tenure, the fund generated 1,028.6%, compared to an average of 389.8%, making it the second best fund in its category. strong per group. He turned an initial investment of £ 1,000 into £ 11,286.49.

James aims to buy innovative companies that have gone under the radar of the mainstream market, invest in them early on, and then hold onto them while their history unfolds. A prime example is Amazon – still one of the fund’s largest holdings, but one in which James has been investing for over a decade.

The fund is really active, which means James can invest in any company from anywhere in the world – he doesn’t have to follow an index.

But another reason I love this fund so much is that James knows his own strengths and weaknesses.

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As such, he sticks to listed companies in the developed world where he thinks he has an advantage, and avoids developing markets by saying, “There’s no way I can cover every stock in every country. and have a good understanding of economic risks – there are much better managers than I specialize in emerging markets.

This refreshing and honest approach also manifested itself after the global financial crisis of 2008-2009, when the fund lost more than James expected during the stock market crash. He learned from his mistakes and has since had a “defensive bucket” of stocks designed to provide a buffer in tough economic environments when correlations increase in many industries.

This defensive compartment was tested to its maximum in 2020, when the coronavirus pandemic caused the global stock market to fall more than 20% from January to its lowest in March. The Rathbone Global Opportunities fund fell less dramatically by 13 percent and was among the top 10 percent of funds in its industry during this period.

James describes his investment process as a “secret sauce”: identifying and focusing on specific “ingredients” or qualities that he likes to see in companies. Typically, these companies are innovative, differentiated and scalable with sustainable growth – they are shaking up their industries as well. He also enjoys flexible, entrepreneurial and prudent business management.

On the other hand, it avoids traumatized, turnaround or restructuring stories, vulnerable leaders, disruptive or unconventional leaders, start-ups, capital-intensive or cyclical companies with high debt.

Its process consists of three stages. The first is to perform high-level fundamental analysis of the business, using its secret sauce framework. This allows many ideas to be ruled out at an early stage.

The second step is to meet with the management of the company and the third step concerns the assessment, which is a key determinant in developing the risk profile of an investment. He is looking for a reasonable valuation combined with increased profits and the possibility of multiple expansion.

The fund tends to favor small and medium-sized companies, especially at the time of investment. They then grow as their story unfolds.

Global markets are quite volatile at the moment. James describes it as a “tug of war, shaken by strong demand for reopening that battles an increase in Covid-19 cases, supply chain disruptions, persistent and sometimes shocking inflationary spikes and a decline in come from central banks ”.

“Add in the fears of not having gasoline or Christmas presents and you can see why investors are fearful,” he said.

But while it may seem like the bad news is accumulating relentlessly, there are still opportunities to be seized.

“Our technology exposure is still an important part of our growth portfolio, but we have reduced it from 29% to 20% this year to create space for industrial companies, consumer stocks, banks and names. of medical technology that we have been. buy, ”James said.

“We did this by seeking to strike and maintain an appropriate balance. We believe that some “old economy” stocks will come out of hibernation as capital spending and capacity expansion plans are triggered to meet higher demand, as many industries modernize and integrate new ones. digital strategies in their existing products and services. “

Past performance is not a reliable indicator of future returns. You may not get back the amount originally invested and tax rules may change over time. The opinions expressed are those of Juliet and James and do not constitute financial advice.


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