Columbia Threadneedle Investments recently launched the Threadneedle Global Focus fund, which will be managed by David Dudding.
The onshore open-ended investment company (Oeic) fund is similar to the £456m Threadneedle Global Focus fund in that it will follow the same investment approach, will be registered for investors outside of the UK, and is also managed by Mr Dudding.
According to Columbia Threadneedle, Mr Dudding believes that high-quality companies make for superior long-term investments.
He said this is the case because the market under-appreciates the value of competitive advantages, which enable some companies to sustain high returns. These companies are able to reinvest capital at higher rates of return, thereby delivering attractive compound growth to investors.
The fund manager said that the approach involves identifying economic moats; seeing how likely companies are to keep rivals at bay for an extended period; and applying Michael Porter’s ‘five forces framework’ to assess the sustainability of those competitive advantages.
The ‘five forces framework’ is a tool created by Harvard Business School professor Michael Porter to analyse an industry’s attractiveness and likely profitability. Since its publication in 1979, it has purportedly become one of the most popular and highly-regarded business strategy tools.
Columbia Threadneedle said Mr Dudding has a global approach to investing in primarily large-cap stocks.
Provider view:
Mr Dudding said: “We believe that well-governed companies can sustain high returns for longer periods than the market assumes. We look for quality growth companies withhigh returns on invested capital that can be sustained over time.
“The advantage of this global approach is that if we think about a particular industry, we are not limited to owning the leading business in a particular region. We can own the leading business in the world.”
Alastair Caw, head of UK wholesale, said: “Dave has an excellent long-term track record of investing in leading global companies within both his global and European portfolios. He has access to the insights of nearly 100 equity analysts around the world, including 30 US-based industry specialists.
“His well-defined investment approach has delivered outperformance for clients in both the short and longer term. I’m pleased that his global strategy will now be available to our UK-based clients within an Oeic.”
Adviser view:
Alan Dick, director at Forty-Two Financial Planning, said: “I don’t see the benefit of an actively managed Oeic fund. We tend to use passive funds, because I just don’t see that [Oeics] support an active stance.It adds cost and there’s no evidence that it enhances returns more than passives.
“With the passive, we don’t have to worry that the manager is not doing what we have asked him to do and there’s no opportunity to deviate from that role. It is much more controllable.”
Fees/charges:
Estimated ongoing charges figure: 0.90 per cent, 0.83 per cent.
