- Ben Whitmore is applying his experience of investing in the UK to invest globally
- He’s a firm believer in the success of buying unloved and undervalued shares
- Although a new fund, we’ve added it to the Wealth150+
Sticking to your principles through thick and thin can be a mark of a great fund manager. To keep on course when many other investors are changing tack takes courage. Going against the crowd may be difficult. But often it will be worth it.
Take Ben Whitmore. For nearly two decades he’s invested in some of the most unloved companies in the UK. When investors have been dumping their shares in out of favour companies, he’s taken the opportunity to pick them up at cheap prices. He doesn’t buy shares just because they’re cheap though. He only invests if he believes the company is good enough to turn itself around and return to favour with investors.
Now Whitmore’s turned his attention to the rest of the world.
He’s recently launched Jupiter Global Value Equity. It uses the same principles he successfully applied to the UK market. Investing globally will present challenges. We don’t find many fund managers able to do it successfully. But with Whitmore’s wider experience and disciplined approach we believe he stands a great chance. That’s why we’ve added it to the Wealth 150+ list of our favourite funds. How he’s done in the past doesn’t guarantee how he’ll do in the future.
Ben Whitmore's track record
Past performance is not a guide to the future. Source: Lipper IM to 31/08/2018.
What does the fund look like?
Jupiter Global Value Equity is co-managed by Ben Whitmore and Dermot Murphy. They look for medium-to-large companies around the world whose shares are out of favour with investors. That usually makes the shares cheaper than they were before. This is often called ‘value investing’. At the same time, they’ll look at a business’s brand strength and financial health. Around 10% of the fund is invested in smaller companies, which adds risk.
The managers invest in around 35 to 45 companies. That’s a relatively small number for a fund to hold. Each one can therefore have a big impact on the fund’s performance. This can be a good thing if the companies do well. If they don’t, it can hurt the performance a lot.
Most of the companies come from developed countries such as the US and Japan. A small part of the fund invests in emerging markets, which can be riskier. Around a third of the portfolio is currently invested in the UK. That’s partly because the UK’s being shunned by so many investors at the moment. This is exactly the environment the mangers look for – lots of unloved companies. Many of those UK businesses have an international reach though, so exposure to the UK economy is reduced. In fact if you combine all the revenue made by every company in the fund, only 10% of it is earned in the UK.
Company in focus
One of the fund’s largest holdings is Ericsson. The company is the global leader in wireless network equipment. It expanded into other areas where it didn’t have as much expertise though. These areas started losing money. This was coupled with a general reduction in wireless equipment spending. As a result the share price has fallen since its peak in 2015.
The managers think the company is sound on the whole though. They were also encouraged when Ericsson’s management started cutting costs and selling the loss-making parts of the business. As the share price fell they saw an opportunity to invest in what they believe to be a good quality company at an attractive price.
There’s a long-running debate about which investment style produces better returns: investing in unloved and undervalued companies, or investing in companies with high growth potential. Ben Whitmore is a firm believer in the former – value investing.
It’s not done as well as investing for growth, however, for the best part of a decade. There have only been two others periods in history where value investing hasn’t done as well for so long: the 1930s Great Depression in the US and the tech bubble of the late 1990s.
Whitmore thinks value investing is due a comeback.
That’s part of the reason he’s decided to start the fund. Time will tell if his preferred style of investing will come out on top again. But if it does, we think Whitmore and Murphy are in a great position to take advantage. Combining their experience of running a similar UK fund with a global reach is an exciting prospect. As ever, how the fund will perform in the future isn’t guaranteed. We think the fund makes an excellent addition to a diversified portfolio.