HIGH-CONVICTION, STOCK-PICKING APPROACH
As a concentrated portfolio of around 35-50 companies, the manager invests only in firms where he has high conviction. Decisions are based primarily on a bottom-up stock-picking process that is complemented by a view of economic and market conditions.
SECULAR GROWTH BIAS
A key driving force in the fund is the managers search for companies that are able to achieve fundamental structural growth in the belief that this will lead to above-average investment returns.
FOCUS ON HIGHLY LIQUID LARGE AND MID-CAP STOCKS
The fund holds company shares from across the market capitalisation spectrum, with a heavier weighting towards highly liquid mid-cap stocks than the benchmark. The manager targets companies with reasonable valuations that are positioned to deliver attractive medium-term growth.
ACTIVE MANAGEMENT TARGETING CONSISTENT LONG-TERM OUTPERFORMANCE
Our manager believes that making active portfolio management decisions is the best way to deliver performance over the long term. Each time he invests, he does so with long-term performance in mind and an understanding of the value that this can provide to investors.
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate. Performance figures are on a bid to bid with net income reinvested basis. Valuations are based on the previous day's prices.
The manager of the LF Canlife UK Equity Fund uses a high-conviction, bottom-up stock selection process complemented by a top down tactical overlay in their pursuit of long-term capital growth. The fund has been designed to be flexible in order to cater for a wide range of market conditions and consists of two divisions, with 80% dedicated to fundamental and structural positions that make up the core and approximately 20% targeting shorter-term tactical positions.
At the centre of the managers investment philosophy is the belief that there are two broad forms of growth available in equity markets: one where the entire market moves forward in a particular direction and one where a single company is able to increase market share by having an advantage over competitors. Structural growth can come from a variety of sources: a marketplace or industry that is growing quickly as a result of specific changes to dynamics, legislation or regulation; or it can be a company that is growing market share through factors such as innovations or barriers to entry.
When it comes to identifying investment opportunities and selecting individual holdings for the fund, the manager follows a well-defined process and are constantly developing a view of the macroeconomic environment as well as current market conditions. These views, in addition to the identification of the themes, trends and sectors that are determined to offer compelling opportunities, are major drivers of investment ideas and stock selection within the portfolio.
Once the manager has found the opportunities and sectors that they find attractive, they then seek out the best companies for investment. Specific holdings selected for investment are determined through fundamental research that is undertaken as a group by the Canada Life Investments UK equities team, with each manager providing input into stock selection decisions. The team also seeks input from the wider Canada Life Investments equity and fixed income teams on matters of global macro and market trends.
The team identifies buys and sells by assessing:
TACTICAL OVERLAY AND MACRO FACTORS
In addition to the core portfolio, the manager also recognises that they can add value through shorter-term opportunities that develop at various points throughout the market cycle. These can be based on thematic and/or global macro trends, and can also take on fundamental structural growth characteristics as well as shorter-term issues.
The manager is highly aware of the influence of macroeconomic themes on the portfolio. While the fund has a bottom-up growth bias, it is not immune to global macro events and therefore the managers use this as an additional factor that can increase or decrease their conviction in a particular area.
Factors in overlay:
Senior Fund Manager, UK Equities
Nigel joined Canada Life Investments in September 2013 as a Senior Fund Manager. He has 24 years of investment experience.
Nigel was previously at Nomura International where he managed an equity long/short strategy. Prior to that, he worked at Gartmore Investment Management for over 10 years and managed an equity long/short fund. His past experience also includes managing UK and Pan-European equities at Royal & Sun Alliance Investment Management. Nigel has a BSc in Economics & Business Economics from the University of Hull and he is a Fellow of the Chartered Institute for Securities and Investment.
Interested in this fund and would like to find out more?
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CANADA LIFE INVESTMENTS HEAD OFFICE
T: +44 (0)20 7415 6546