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M&G Recovery Inclusive - Class X - Accumulation (GBP)

Sell:309.30p Buy:309.30p Change: 2.15p (0.70%)
Prices as at 6 May 2021
Change: 2.15p (0.70%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 6 May 2021
Change: 2.15p (0.70%)
Prices as at 6 May 2021
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

The M&G Recovery fund invests in UK companies that have fallen upon hard times, but where there is scope for a transformation in fortunes. This contrarian approach could bring diversification to the UK section of a broader investment portfolio. It could sit well alongside a UK equity fund that focuses on companies expected to grow earnings at a more consistent pace.

Tom Dobell, the fund's prior longstanding manager, stepped aside at the end of 2020 and was succeeded by deputy manager Michael Stiasny. He's been on the Recovery team since 2011, so has good knowledge of the companies it invests in. He also has the support of the broader UK Equity team, including deputy manager Elina Symon.

Overall though, we feel there are lots of talented fund managers in the UK All Companies sector and we currently have greater conviction in others to deliver strong performance over the long run.

Our view on the sector

The UK stock market is home to lots of world-class companies. From international giants to a diverse array of smaller businesses. This provides a rich hunting ground for fund managers in this sector. They all try to grow investors' money over the long term, but each goes about it in a different way. Some focus on larger companies in the FTSE 100 index, others invest in medium-sized or smaller companies, and some have the flexibility to invest in any company, regardless of size. Some aim to match or deliver a return similar to the broader UK stock market. Others have the freedom to try and make as much money as possible for investors and take more risks. That could mean investing in only a small number of companies, for instance. A fund that invests in UK shares is normally the first port of call for UK-based investors. But with such a variety on offer, investors should make sure a fund is right for their circumstances before investing.

Performance Analysis

Aside from some short periods of strong performance, like in 2016, the fund’s recovery-focused investment approach has been out of favour in recent years. Investors generally preferred to invest in companies that can grow earnings more consistently, otherwise known as 'growth' stocks, rather than those that are unloved today but could potentially deliver handsome returns in the future.

Even accounting for the fund’s investment approach though, it hasn’t performed as well as we’d expect, given the type of companies it invests in. This suggests the managers’ stock selection held back returns.

Investment Philosophy

Michael Stiasny focuses on the prospects for individual companies rather than what's happening in the wider economy. He looks for unloved companies that have fallen out-of-favour, but where there's scope for a transformation in fortunes.

Process and Portfolio Construction

Stiasny invests in companies unloved by other investors. Maybe they failed to meet investor expectations, or their managers made some unpopular decisions. Whatever the reason, to be considered for the portfolio, Stiasny must believe the company is capable of a recovery.

The investment process starts with a screen of the UK stock market, which aims to identify the market's cheapest companies on a variety of valuation measures. Then the team carries out in-depth analysis on each company, paying particular attention to the company's cashflows, people and recovery strategy.

That results in a portfolio of 60-80 companies that fall into four recovery buckets: unloved, stabilising, recovering well and mature. As companies make it into the 'mature' bucket, the manager gradually begins to take profits, reinvesting them into other unloved opportunities.

The manager has the flexibility to invest in companies of any size, including higher-risk smaller ones.

question mark Manager Track Record Based on HL Quantitative Research

  • M&G Recovery A Inc
  • IA UK All Companies

Fund Track Record

05/05/16 to 05/05/17 05/05/17 to 05/05/18 05/05/18 to 05/05/19 05/05/19 to 05/05/20 05/05/20 to 05/05/21
Annual return 28.03% 4.66% -3.43% -33.58% 43.31%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

M&G was established in 1931, and is today one of the largest active investors in the UK. In 1999 M&G was acquired by Prudential, one of the largest financial services providers in the UK and Europe. M&G is an autonomous business unit within the Prudential Group, retaining its own style but benefiting from the advantages of belonging to a large parent company.

M&G is not interested in chasing 'hot stocks' or market fashions. Its fund managers invest for the long term and have the freedom to think independently and act on their convictions. They are also backed by M&G's extensive experience and in-house research capabilities, across all key asset classes - equities, fixed interest and commercial property. One sector in which M&G has been particularly successful is in corporate bonds.

Information about the fund

Fund manager biography

manager photo
Manager Name: Michael Stiasny
Manager start date: 31 December 2020
Manager located in: London

Michael Stiasny is the fund manager of Charifund and, since 1 April 2018, of the M&G UK Income Distribution Fund. He is also deputy fund manager of both the M&G Recovery Fund and the M&G Global Recovery Fund. He joined M&G in 1998 as an equity analyst, becoming head of the pan-European equity research team in 2005. He was appointed deputy fund manager of the M&G Recovery Fund in 2011. Michael graduated with a degree in philosophy, politics and economics from the University of Oxford. He is a CFA charterholder.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account