Naturally investors should remember that the track record for the fund is short. However, Mr Niznik also ran similar funds at his previous employer, Invesco Perpetual. The fund’s low initial charge of 3.5% is also a plus.
The investment process is purely stockpicking. The manager does not take strategic cash positions, preferring to b
e always fully invested in shares.
Unlike other funds Mr Niznik does not limit the fund’s sectoral exposure against a benchmark index or its peers. Although he is a bottom-up manager he pays attention to the macroeconomic influences affecting the companies in the fund.
For example, Mr Niznik would not want the portfolio to be too exposed to a drop in consumer demand. He will look across sectors that would be impacted by a fall such as car dealers, house builders and retailers to ensure he is comfortable with the level of exposure in his portfolio.
The manager also controls risk in the portfolio by limiting the size of each holding to a maximum of 5%. In practice he is unlikely to hold more than 3% in any one firm.
Over the past eight or so months the manager has halved the fund’s exposure to retailing firms by taking some profit in these shares. He expects the outlook to get tougher for the sector as interest rates rise. Construction is currently the largest single sector, making up about 11% of the fund.
According to Mr Niznik the biggest contributors to performance since the launch of the fund were Incisive Media and French Connection. The biggest detractors have been Goshawk Insurance, which he has sold, and EasyJet, which he still owns.
