Tracker or managed fund?

carnet

cloud_dog wrote:

Mr Scott doesn't appear in the top 20 so I cannot comment.

Ted Scott is the long-standing and very successful manager of the F&C Stewardship Inc. fund. This is an ethical fund and, as such, has all the constraints as to which companies it can invest into that this implies. However, despite these restrictions, his ability has still managed to deliver top quartile results over the medium term (3-5 years) against his unconstrained peers in the sector.

A few months ago he was handed a relatively small, previously underperforming and crucially, unconstrained fund to manage for the first time - and has already started to turn it around.

This is the fund I was referring to .

It is surprising that he did not appear on the list you looked at as he is very highly regarded within the industry and frequently turns up on "best UK Eq. Inc. managers" tables I see.

Such as here;

http://www.citywire.co.uk/CFI/Home.aspx

where he lies 4/25 over 5 years (this will need altering to 5 years at the top of the page) in the UK Eq. Inc. sector - and that is in respect of his constrained fund !

He also lies in 3rd spot (even ahead of George Luckraft ) in Bestinvest's list of top UK Eq. Inc. managers over 5 years ;

http://www.bestinvest.co.uk/fundmanagers/fmpro?-db=webprices.fp5&-format=index.htm&-token=ukequityincome&-token.1=99&-token.2=5&-view

EdInvestor

The F&C Stewardship fund is indeed an excellent performer, it's an Equity Income fund of course, the ethical is pretty incidental ( there are not many top income stocks other than tobacco shares and perhaps Bae Systems which would be ruled out.)


Hi clouddog

The reason I pick growth as opposed to income is principly because stocks that generate income tend to be established or relatively mature companies who have the available cash flow to pay dividends.

Yes

Young companies tend to re-invest the majority, if not all (plus possibly more - debt) so as to grow the company / market share.

Yes


And the next step ( and this is where the idea stumbles) is that only growth in the company itself and/or its market share will generate growth in its share price.

Not so.

You only have to look at what's happened to the utilities - or the likes of Lloyds Bank ( divi: 6%+ top UK income share) lately to see that capital growth is not confined to so called "growth stocks". If it ever was. One gets the impression that "growth stocks" were an invention of the tech era to cover up the fact that most of these companies had no money..

carnet

EdInvestor wrote:

The F&C Stewardship fund is indeed an excellent performer, it's an Equity Income fund of course, the ethical is pretty incidental ( there are not many top income stocks other than tobacco shares and perhaps Bae Systems which would be ruled out.)

Simply not true for the following reasons;

Companies also involved in such businesses as armaments, gambling and alcohol are not considered.

However, the most important point is that traditionally high yielding stocks such as oils and banks are also considered unethical.

This is one of the main reasons why it is run on the barbell system - only circa 30% in high yielding stocks and bonds and 70% in growth stocks.

Thus a large part of the FTSE All Share Index is excluded from consideration.

In any event, this is not the fund I had in mind (albeit also a barbell ).

cloud_dog

EdInvestor wrote:

And the next step ( and this is where the idea stumbles) is that only growth in the company itself and/or its market share will generate growth in its share price.

Not so.

You only have to look at what's happened to the utilities - or the likes of Lloyds Bank ( divi: 6%+ top UK income share) lately to see that capital growth is not confined to so called "growth stocks". If it ever was. One gets the impression that "growth stocks" were an invention of the tech era to cover up the fact that most of these companies had no money..

I accept your points but, surely you are being a tad simplistic. No one says that only so called growth stocks grow the SP, thats an unreasonable / unrealistic stance. You mention LLoyds, I would say that their recent rocket rise is down to possible bid speculation rather than the managment of the company. Similarly it is likely that some investors (institutional) have been moving funds into utilities as a defensive move but also as people feel larger companies appear (relative PE ratio's, etc) to offer good opportunities going forward. Therefore if a growth fund saw value in a high yeilding utility it could / would invest in it (assuming the funds own guidelines allowed it to, i.e. market size, etc, etc).

I stand by my original point, that if I were a new, relatively young investor I would start by investing via a monthly investment plan investing in a top UK growth fund. There is no reason why you would not look to add other funds / diversify as time moves forward.

cloud_dog