Some funds are formed with reference to specific benchmarks. Others, such as the Rathbone Global Opportunities Fund, contain only the manager's best ideas. In this case James Thomson readily shifts the portfolio in response to new opportunities, wherever they may arise. Specific sectors and countries may be heavily under-represented or non-existent if he can't find any attractive companies. We like this approach, but it does mean performance can vary significantly from other funds in the sector.
James Thomson looks for companies with scalable business models and repeatable revenues, but which are not presently on the radar of mainstream investors. He also aims to identify a catalyst, either specific to the company or relating to the wider economic environment, which will help drive the businesses' future growth.
Pharmaceutical companies now represent approximately 8% of the fund, despite the manager never holding a pharmaceutical company before 2014. This change is a response to exciting developments within the industry, particularly the advent of genome mapping. This allows drugs to be tailored to individual patients, potentially driving innovation and contributing to higher profit margins for their developers. Gilead Sciences is one such company. It has been added to the fund following the successful development of a Hepatitis C drug, 'Sovaldi', which sold strongly in the US last year and adds to Gilead Sciences' stable of pharmaceutical solutions.
Presently, over 60% of the fund is invested in US companies. There is currently no direct exposure to higher risk emerging markets, reflecting James Thomson's belief that the rebalancing of China's economy from being investment-driven to consumer-based will be a painful one. Japanese exposure is also absent from the fund, with the manager unconvinced of the likely success of Abenomics.
Between 2004 and 2007 the fund significantly outperformed the sector, but suffered during the global financial crisis in 2008. This was mainly the result of a bias to higher risk small and medium-sized companies and to those which are particularly economically sensitive.
Performance since James Thomson took over
Past performance is not a guide to future return. Source Lipper IM to 02/02/2015.
Since 2008, James Thomson has aimed to reduce volatility by 'weather-proofing' the portfolio. Typically, 20% of the fund is now invested in more defensive companies, and those he believes could be more resilient in the event of a downturn.
The volatility of the fund has been lower since 2008, though it should be noted the fund has yet to be tested by a severe market downturn.
|Annual percentage growth|
| Feb 10 -
| Feb 11 -
| Feb 12 -
| Feb 13 -
| Feb 14 -
|Rathbone Global Opportunities||26.61%||-0.07%||15.03%||14.53%||10.50%|
|MSCI AC World||19.31%||-1.45%||15.66%||6.66%||19.60%|
Past performance is not a guide to future returns.
Our view on this fund
Since James Thomson took over this fund in July 2005, he has consistently delivered above average returns for investors, although please note past performance is not a guide to future returns. Our analysis suggests good stock selection has been the primary driver of performance. The concentrated nature of the portfolio means each of the manager's investment choices has greater impact; however, it is higher risk.
We believe the manager's method offers investors a different approach with the potential to deliver returns divergent to the market and to other managers in the sector. This is one of our favoured funds for exposure to global equities and we are confident James Thomson has the ability to deliver over the long-term. We remain happy with this fund and it continues to feature on the Wealth 150 list of our favourite funds across the major sectors.
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