Mark Dampier: New fund has mix of age and experience

The Analyst

New fund launches often sound exciting, but for me it's the experience of the manager launching the fund that really counts. So the launch of Marlborough's Multi Cap Income fund, managed by Giles Hargreave and Siddarth Chand Lall, immediately caught my eye. The record of Marlborough Special Situations and Marlborough Micro Cap Growth should speak for themselves, but for those unaware Marlborough Special Situations is the best performing unit trust across all sectors since launch in July 1995, having risen 1360 per cent.

This is Giles Hargreave and Siddarth Chand Lall's first foray into equity income and the key question is: can they make the transition? Frankly I see no reason why not. I rarely take much notice of back testing, but it is interesting to note that had the fund launched a year ago with their current portfolio of stocks, they believe it would have grown well over 50 per cent. This at a time when equity income has struggled.

A key attraction will be their focus on medium-sized and smaller companies, their specialist area. Funds from Chelverton and Unicorn have stood out in the smaller company universe recently, but few others have. This new fund should be a welcome addition in a sector where many well-known funds hunt in the large cap arena. The fund will certainly have some exposure to large companies to help with liquidity – a key consideration when investing in smaller businesses.

The investable universe for the fund is 717 companies which Giles Hargreave and Siddarth Chand Lall reduce to around 500 using their own filters. They look for a minimum dividend yield of 2 per cent, but are not chasing yield for the sake of it. They are looking for strong dividend players that can not only sustain, but grow their dividend in the years ahead. This will become increasingly important, especially for an ageing population facing rising living costs. In this situation a growing income is far more valuable than one that is fixed.

Critics might argue there is over-reliance on Giles Hargreave, chief executive of Hargreaves Hale, and point to his age of 62. Having met Mr Hargreave a number of times I see no sign of his appetite for the job or work ethic waning. Furthermore, he has surrounded himself with a strong team. Co-manager Siddarth Chand Lall is 31 years old and joined Hargreave Hale in 2007. Giles Hargreave has blended young and old into a team with over 125 years of market experience. The result is a vast swathe of contacts and a huge network of brokers from which to generate ideas.

As stock pickers they also meet senior management of companies, in many cases having an existing relationships garnered from previous successes. The team combines this with rigorous analysis of financial statements and testing of their models; essentially looking to establish the sustainability of dividend payments. Their ideas are discussed at formal weekly meetings, and in essence when buying this fund you are buying the decades of experience sat round this table.

A degree of volatility should be expected from a fund focusing on smaller companies, but I welcome this in a space dominated by some very large players. This fund could dovetail well with funds such as Invesco Perpetual Income, Artemis Income and PSigma Income, all funds I have highlighted before in this column.

Finally, I have to admit that given the performance of Giles Hargreave and his team over the years it is a wonder they are not better known. One thing I do know is they won't let this fund grow to billions of pounds. They probably don't want more than about £200m, so if you like the story acting quickly is the order of the day.

Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit www.h-l.co.uk/independent

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive + incentives + uncapped comms: SThree:...

    Recruitment Genius: Telesales Executive - OTE £25,000

    £13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...

    Ashdown Group: Graduate Developer (Trainee) - City, London

    £25000 per annum + benefits: Ashdown Group: A large financial services company...

    Day In a Page

    The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

    The Silk Roads that trace civilisation

    Long before the West rose to power, Asian pathways were connecting peoples and places
    House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

    The honours that shame Britain

    Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
    When it comes to street harassment, we need to talk about race

    'When it comes to street harassment, we need to talk about race'

    Why are black men living the stereotypes and why are we letting them get away with it?
    International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

    International Tap Festival comes to the UK

    Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
    War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

    Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

    Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
    Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

    'A subversive brothel keeper and Communist'

    Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
    Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

    BBC heads to the Californian coast

    The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
    Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

    Victorian fraudster who shook the Bank of England

    Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
    Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

    Car hacking scandal

    Security designed to stop thieves hot-wiring almost every modern motor has been cracked
    10 best placemats

    Take your seat: 10 best placemats

    Protect your table and dine in style with a bold new accessory
    Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

    Cook not the only one to be caught in The Oval mindwarp

    Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
    Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

    Can Benitez get the best out of Bale?

    Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
    Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

    Beijing witnesses new stage in the Jess and Kat rivalry

    The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
    Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

    Jeremy Corbyn interview: A shrewd operator desperate for power

    His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
    Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

    Isis executes Palmyra antiquities chief

    Robert Fisk on the defender of the ancient city's past who was killed for protecting its future