Most investors probably haven't heard of Paul Mumford. That's a pity. As head of the £31m Cavendish Opportunities Fund, he's one of the most experienced managers around. After cutting his teeth in the 1960s as a stockbroker with Norris Oakley Brothers, he went on to set up the Opportunities fund in 1988. He's still there today and still churning out profits. Over the past five years, he's returned 188% against 131% for the FTSE Small Cap Index.
Focusing on small-cap growth stocks, Mumford believes the market "has underperformed in the last month. As such, it's becoming attractive again. It has the advantage that a lot of its ratings are low", he tells the Financial Times. "We seek to invest in companies that would not look expensive in 12 to 18 months' time," even if the share price doubled over that period, he says.
Mumford is particularly keen on the oil sector. He prefers smaller stocks because they focus on exploration and production, while the majors are spending their cash on share buybacks. Roc Oil and Soco International are among his top-ten picks. "Smaller players have also found it easier to penetrate foreign markets and form meaningful partnerships... vital as geopolitical reliance increases," he tells Investors Chronicle. "There are many opportunities among the minnows, particularly on Aim, where growth potential is huge and a number of companies have well-diversified geographical interests that are already showing promise."
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Cavendish Opportunities Fund top ten holdings
Name of holding, % of assets
International Ferro Metals, 4.40
MS International, 3.80
Roc Oil Co Ltd, 2.80
Advanced Medical Solutions Group, 2.80
Boot (Henry), 2.50
Senior, 2.30
Inspace, 2.10
Soco International, 2.00
African Copper, 2.00
Dana Petroleum Plc, 1.90
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