M&G UK Select – change of manager
Kate Marshall | Mon 31 October 2016
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Mike Felton has stepped down as lead manager of the M&G UK Select Fund and will leave the group with immediate effect. Sam Ford is set to take over management of the fund in January 2017, although this is subject to approval at M&G. Until the end of this year, the fund will be managed by its co-deputy managers, Garfield Kiff and Rory Alexander, who have been involved in its management since 2012 and 2016, respectively.
Sam Ford joined M&G in 2014 as an analyst for the Income team. He was appointed deputy fund manager of the M&G Pan European Dividend, M&G Dividend and M&G Extra Income funds in February 2015.
Sam Ford will continue to invest in UK companies with the aim of delivering long-term capital growth in the UK Select Fund, although he will apply his own investment approach. Previous manager Mike Felton adopted a contrarian approach and sought unloved companies with longer-term potential for improvement. He also considered global economic issues in order to identify areas of value.
Sam Ford, however, tends to focus more on the prospects of individual companies rather than wider economic factors. With previous experience as an income investor, he seeks companies with the potential for rising levels of cash generation, which could be paid out to shareholders in the form of dividends, although it should be remembered all dividends are variable and not guaranteed. While he will continue to invest in cash-generative companies in the UK Select Fund, he will place greater emphasis on those that reinvest this cash to grow the business.
The manager is also likely to construct a more concentrated portfolio of 35-40 stocks, compared with 48 in the current portfolio. This means each investment will have a greater impact on performance, although this is a higher-risk approach.
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Our view
The M&G UK Select Fund does not currently feature on the Wealth 150 list of our favourite funds across the major sectors and we will not be considering it for inclusion at this time. The UK All Companies sector features a number of high-quality fund managers with long track records of which we feel we already have a good line-up on the list. While Sam Ford is regarded as an astute investor at M&G, he does not have any fund management track record in his own right. We would prefer to monitor performance for a prolonged period and after the new manager’s changes are complete before considering the fund for the Wealth 150+.
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