Five fund picks for pension investors
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IFSL Marlborough Multi Cap Income
This fund ventures into the small-cap space where other income funds fear to tread. It aims to combine fast and sustainable dividend growth with capital appreciation. The acclaimed stock-picking ability of the Hargreave Hale team has led to significant outperformance since the fund launched in July 2011. The portfolio is constructed primarily on a bottom-up basis; however, top-down drivers do also influence the creation of the portfolio. The fund uses a blend of ‘value’ and ‘growth’ holdings to meet its yield objective.
Our opinion
A well-resourced fund that offers something radically different from the majority of large-cap FTSE100 income funds. This well-structured and highly experienced team will likely continue to take advantage of small-cap opportunities, which other managers and brokers often ignore. The team is renowned for its experience in this area of the market.
Company description
Marlborough Fund Managers offers investments across various asset classes, ranging from UK fixed interest to international equities and exchange traded funds (ETFs). It was awarded the Elite Provider for Equities rating each year from 2016 to 2021. Marlborough’s managers are hand-picked and given freedom to invest as they feel optimal in the fund’s sector.
Hargreave Hale, who are investment managers for some of Marlborough’s funds, are a merger of Hargreave Investment Management and Hargreave Hale & Co, the former having been founded in 1986. The management of this fund is outsourced to the Hargreave Hale team, who are recognised specialists in the small-cap space.
Fund manager
Siddarth Chand Lall has managed this fund since its launch in July 2011. A graduate from Edinburgh University, he previously worked as a pan-European small and mid-cap specialist at DSP. He joined Hargreave Hale in 2007 to work closely with Giles Hargreave on the Elite Rated Marlborough Special Situations Fund before being appointed to manage the IFSL Marlborough Multi Cap Income Fund. He has more than 13 years’ experience on the buy side.
We believe in the power of compounding growth in dividends, especially in the small and mid cap sector, which offers an attractive combination of growth and income.
Siddarth Chand LallFund manager
Investment process
IFSL Marlborough Multi Cap Income fund invests in a combination of FTSE 350 and much smaller companies, with a premise that these firms tend to outperform over the long run. The manager sources ideas from the team and a network of brokers, studying financial statements and using models to test the sustainability of dividend payments. Management meetings are key and 65% of the fund is in stocks with a market cap of less than £1 billion. Stocks are constantly re-assessed and sold when there is potential for the dividend to be compromised.
ESG
ESG - Limited
Sid has a strong focus on governance with this fund. He is looking for management teams who will act responsibly with regards to their environmental impact, and society as a whole. Meeting management is a key part of his process. Here, Sid will discuss the research and analysis he has on the firm, including financial and non-financial factors. The latter includes information on ESG matters. This work will be incorporated into the overall view of the company, but is not disseminated or formalised into specific E, S & G categories.
Risk
The fund invests in much smaller companies than its peers, however it has holdings in a large number of stocks to ensure it is well diversified. Despite investing in smaller companies, volatility is typically lower than most of its peers in the UK equity income sector.
Read more about this fund
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