Ecclesiastical is well known for its ethical funds. But in one corner of the office "there is a fund full of vice", writes The Guardian's personal finance editor Patrick Collinson in Fund Strategy. And it's doing rather well. The Ecclesiastical UK Equity Growth fund is ranked ninth out of 323 funds in the UK All Companies' sector over one year. It is also in the top quartile over three years, with a ranking of 45th out of 302 funds.
"I call it the vice fund'," manager Andrew Jackson confirmed to Fund Strategy. "In it are some of the many things that are bad in life." The portfolio ranges across companies in tobacco, alcohol and petrochemicals and features names such as British American Tobacco, oil and gas firm Royal Dutch Shell and miner Rio Tinto in its top ten. The fund has 84 stocks, 50% of which are in the FTSE 100, 40% in the FTSE 250 and 10% in small caps. Sector-wise, the fund is riding on the back of a British industrial resurgence, with a hefty 35% of the portfolio in industrial stocks.
"It's still a fact that Britain has a pretty good collection of world-class industrial, chemical and pharmaceutical companies, and we are still one of the world's largest manufacturers," says Jackson. Each investment is capped at 4% of the overall portfolio. Yet Jackson's average holding period is still seven years. He looks for quality stocks (which have "verifiable earnings and the most secure profits streams"), aiming to earn 50%-100% over a three to four-year period.
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So, what's the fund's secret to success? Positive thinking, argues Jackson. "I'm the desk optimist," he says. Optimism helps you pick stocks and run with them.
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Ecclesiastical UK Equity Growth Fund top ten holdings
| Oxford Instruments | 3.6 |
| GlaxoSmithKline | 2.7 |
| Royal Dutch Shell B | 2.5 |
| Spectris | 2.4 |
| BG Group | 2.4 |
| British American Tobacco | 2.4 |
| Vodafone Group | 2.3 |
| Senior | 2.2 |
| Rio Tinto | 2.1 |
| Next | 2.1 |
