Allianz UK Listed Opportunities

Allianz UK Listed Opportunities is a contrarian value UK equity fund that invests in UK businesses of all sizes. The manager seeks out cheap companies with a margin of safety and is not afraid to go against the grain.

Our opinion

This fund has a solid value strategy and a clear process that has consistently worked over many years. We like the manager’s flexible pragmatic nature, and the fund never strays too far from its core value principles. The fund has a good long-term track record despite the historic the fact that value strategies have struggled more than growth since the great financial crisis. We expect the fund to continue its success under new lead manager, Richard Knight.

Fund manager

Richard Knight joined Allianz in November 2013 as part of its global graduate program, and became lead manager on this fund in September 2022. In addition to being the lead manager on this strategy, he is also the co-manager of the firm’s UK equity income fund. Richard specialises in value and income investing and was previously an analyst on the European media and telecoms sectors. Richard graduated from Lincoln College, Oxford with a degree in History and Politics. He also holds a masters in Global Economic History from the London School of Economics. He is a CFA charterholder.

He is supported by deputy portfolio manager Simon Gergel, who is also Chief Investment Officer, UK Equities.

Richard KnightFund manager

Investment process

This is a high-conviction strategy based on the simple but proven idea of buying cheap companies trading below their fair value. The team believes that the psychology of markets has always created opportunities – it excessively bids up shares on good news and excessively sells them on bad news. The team believes that actual intrinsic value remains much more stable than share prices and this presents opportunity for the disciplined investor.

The fund seeks to buy cheap stocks with a margin of safety. It is contrarian, opportunistic and concentrated. However, the fund's philosophy is pragmatic, and rather than simply trying to buy every single cheap stock, the team takes a more nuanced ‘value-driven approach’. This has allowed the fund to achieve performance in different market conditions.

Being cheap is never enough by itself and the team conducts detailed fundamental analysis on companies before it has the confidence to take a position. A range of factors are included in the analysis, including balance sheet strength, management quality and the company’s competitive advantage. This analysis helps the team to find the best risk reward opportunities.

The team also considers themes which are driving the companies it invests in. Themes can be long-term positive but, interestingly, they can also be headwinds which the team believes the market has mispriced, such as the shift away from fossil fuels.

Initial ideas are generated from internal screens or external broker analysis. If an idea looks interesting, further detailed analysis is conducted. Stocks tend to fall into one of three buckets. The first is classic value stocks - exploiting market sentiment in fundamentally sound business. The second is franchise – strong growth businesses at reasonable prices – and the third is special situations or uncorrelated ideas with unique catalysts. The best ideas then go into the portfolio.

ESG

Unlike some value investors, the team does not believe in dismissing ESG issues out of hand. It looks to invest in companies where ESG issues are improving and not yet priced in. This requires a high level of fundamental analysis. ESG factors are incorporated into all investment decisions. There are firm-wide exclusions on investments in coal and controversial weapons stocks.

Risk

The fund is quite concentrated so individual stock selection will influence performance. It is an all-cap strategy and typically has a high proportion in mid- and small-caps, which can be more volatile than their large-cap peers. Given its clear style, performance can be quite lumpy. The fund has had large drawdowns in the past and has historically been about as volatile as the index.

See more

Read more about this fund

The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.