ISA season 2020: Funds to shake up your investment portfolio
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RWC Continental European Equity
The RWC Continental European Equity fund is run by a highly experienced team which has consistently outperformed. The fund is pragmatic, with no particular style bias - other than a preference for medium sized companies.
Our opinion
Despite his experience and impressive track record, manager Graham Clapp is under the radar for many UK investors. Graham and his team have a clear idea of how to add value and they have managed to do this consistently. In light of RWC’s acquisition of Clapp’s firm Pensanto Capital in 2017, we would expect this fund to deliver under RWC’s umbrella.
Company description
Set up in 2000, RWC is an independent investment management firm that is employee-owned. The company has offices in London, Singapore and the US.
Fund manager
Graham Clapp is one of the most experienced fund managers in the industry. He started his career at Fidelity Investments in 1984, where he built a strong track record running a European institutional mandate. He then took over the Fidelity European Growth fund in 2002 from renowned fund manager Anthony Bolton. During Clapp’s tenure, it became the largest mutual fund in Europe. After more than 20 years at Fidelity, Graham left Fidelity in 2006 to set up Pensato Capital. Eleven years later the business was acquired by RWC.
After 30 years and more than 15,000 discussions with companies about their prospects, I find the opportunities for generating alpha are better than ever.
Graham ClappFund manager
Investment process
The process underpinning RWC Continental European Equity is designed to identify companies that are likely to exceed market expectations. Once these companies have been identified, the team undertakes detailed fundamental analysis to understand the business better than the market. Company meetings are very important and the team will conduct around 800 every year. Once the analysis is complete, companies are given a rating to indicate where the team thinks the share price will be in three years’ time. The best ideas tend to be found amongst under-researched mid-caps.
Risk
The average position size is typically around 3%, which prevents any holding from dominating the portfolio. RWC Continental European Equity fund is well-diversified by country and sector. Stocks are valued using different scenarios, with the team looking for investments where there is good risk/reward trade-off. The fund is pragmatic and does not have a particular style bias, other than a skew towards mid-caps.
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