When Citywire AAA-rated Aled Smith first took the helm at the M&G Global Leaders Fund in September 2002, it was worth £115m. The size of the fund has since tripled, yet the little-known fund manager returned 79.7% over the three years to July 2006 that's against 43.6% for the FTSE World index.
Global markets fell in May, wiping the gloss off many fund managers' portfolios, but Smith was one of only three who managed to make a return of more than 30% in the year to 30 June 2006. So it's no surprise that Money Marketing believes that "he has the potential to be one of the best-known fund managers in the future".
Smith looks for firms who want "to stimulate growth through restructuring", he tells Investment Adviser. Using the Holt Valuation tool to help him screen some 18,000 global stocks, he finds "companies that are restructuring their capital more efficiently", says Money Marketing specifically those "that are returning more than their cost of capital".
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The fund is highly concentrated in Germany and the US, where he thinks many large caps are cheap. "Although we have a cautious outlook for American markets as a whole, there is value to be had," he tells the Times. "It really is a stockpicker's market. Large-cap values have not gone up much recently but profits have, so the market has been re-rated and it looks more attractive."
This bottom-up approach to stock selection has made many keen on the fund. "Having met Aled, we were impressed by him and his process and the good performance is testament to that," says Darius McDermott of Chelsea Financial Services in the Daily Mail. "He is a manager many might not know, but one we like very much."
Contacts: 0800-390390, www.mandg.co.uk
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