Franklin UK Managers' Focus - a different way to invest in the UK
Dominic Rowles | Fri 20 July 2018
The links in this article will take you to Hargreaves Lansdown’s main website for more information. Please be aware that if you wish to join any of the benefits in your company Plan you must return to this website to apply.
- A fund with five talented investors behind it
- Fresh opportunities in the industrials sector
- We like the unique approach, so it still features in the Wealth 150+
Our View
You’ve got to do something different to beat the performance of the UK stock market.
The Franklin UK Managers' Focus Fund does just that. It’s run by five exceptional investors – three have a specific focus on large, medium-sized or smaller companies, one can invest in companies of any size. Veteran investor Mark Hall oversees the fund, challenging the individual managers on their ideas.
The number of investments each manager can add to the portfolio is restricted. This means only their best ideas make it in and the performance of each investment can have a meaningful effect on returns. This increases risk, as do the fund’s investments in smaller companies.
Our analysis shows the managers’ unique approach has benefited performance over the long run, although there are no guarantees this will continue. We think this five-strong team is one of the best in the industry. That’s why their fund is still on the Wealth 150+ list of our favourite funds in the major sectors.
How has the fund performed?
The fund has a great long-term track record. An investment of £10,000 made when it launched in September 2006 would be worth £28,935*. An investment in the UK stock market would have returned £21,015* over this time, although this shouldn’t be seen as a guide to the future.
We put this strong performance down to the managers’ ability to select companies of all sizes with strong prospects.
| Annual percentage growth | |||||
|---|---|---|---|---|---|
| June 2013 -
June 2014 |
June 2014 -
June 2015 |
June 2015 -
June 2016 |
June 2016 -
June 2017 |
June 2017 -
June 2018 | |
| Franklin UK Managers' Focus | 19.3% | 16.7% | -5.5% | 23.8% | 10.5% |
| FTSE All-Share | 13.1% | 2.6% | 2.2% | 18.1% | 9.0% |
Past performance is not a guide to the future. Source: *Lipper IM to 30/06/2018.
The fund’s performance was good over the past year, too. It beat the broader UK stock market by 1.5%, but this isn’t a guide to how it will perform in the future.
Over this period, certain investments did particularly well. These include: ZPG - owner of property and comparison sites Zoopla, Prime Location and uSwitch – which received a takeover offer from a US firm that caused a strong rise in share price, and Bodycote – an engineering business that did well when it released results that were stronger than expected.
How's the fund invested?
Each manager is responsible for their own portion of the fund. But each investment is carefully considered by the whole team before any changes are made.
They’ve found lots of opportunities in the industrials sector. Almost 30% of the fund is invested here. They recently invested in Vitec Group which makes high quality photographic and video equipment. The managers expect it to do well as both professional outfits and individuals produce more and more content.
The fund doesn’t have many investments in the retail and travel & leisure sectors. Companies in these industries often own shops and spend lots of money on staff. The managers think this makes them vulnerable to online competitors whose costs are much lower, which means they can charge lower prices to their customers.
Please read the Key Features/ Key Investor Information in addition to the information above.