We have added JOHCM UK Dynamic to our Recommended list.

Fund Snapshot

A value-biased UK equity fund.  The team focuses on business transformation opportunities that are underappreciated by the market, seeking discounted valuations combined with identifiable strategic improvements.  Within its sector, the fund features in our ‘Value-Biased’ category.

Fund Highlights

• Senior Manager, Vishal Bhatia, and manager, Tom Matthews, alongside senior manager, Mark Costar, took over the management of the fund in 2024 following the departure of the previous manager.  They are experienced investors, who, collectively, have managed UK equity funds across different market environments.
• The team believes that corporate change is frequently ignored or underappreciated by the market.  They look for restructuring, recovery and hidden growth situations that are created by prolonged underperformance, which results in a company’s share price deviating from the true value of the business assets or long-term cashflows.
• They employ a patient and methodical approach to ‘change’ investing.  The approach has been tested over the years, and they have been willing to bring new innovations to the process.
• 'Recurring Equity Value’ is an important part of the process.  The team looks for companies on low valuations, where crucially there is an acceptance of the need for change, allowing the investment to benefit from a 'double margin of safety'.

Key Characteristics and Expected Outcome

• The team looks for business transformation opportunities where share prices are under a cloud of uncertainty. This means that the approach is innately contrarian, resulting in an idiosyncratic risk/return profile.
• Although the team does not target a specific investment style, the fund naturally displays overt value characteristics and has a mid to large-cap profile.
• The team pays close attention to absolute risk in the sense of ensuring good diversification across types of businesses and sectors and appropriate balance within the portfolio, which helps mitigate some of the inherent risks of the approach.
• The strategy typically enjoys periods of strong relative performance when value is in the vanguard and improving fundamentals are recognised. Equally, it is likely to struggle at times of market uncertainty, when investors are less inclined to give businesses the benefit of the doubt.
• The fund is suited to value-orientated investors who have a long-term horizon and are attracted to the concept of opportunities from corporate change.  For those who are concerned about risk versus the benchmark, it should be deployed as a complementary holding within a blend.

To view our factsheet, please visit the fund page on our website.