Much of Thomas Moore’s current approach to fund management can be linked to his younger years. Now in his fifth year as manager of Standard Life Investment’s UK Equity Income Unconstrained Fund, it was his amateur stock-picking as a teen, the influence of an important book and his experience of the tech bubble that eventually moulded his now trademark investment strategies.
Unlike most of his peers, the Standard Life Investments manager, was convinced from an early age that he wanted to run investment portfolios because of his love for numbers and fascination with economic trends. While some of his friends would go out to play, Mr Moore took comfort in studying share prices and reflecting on the dynamics behind their individual movements.
After putting together a couple of hundred pounds in savings, his first play came in 1989 when, at the age of 14, he invested in Thames Water. Although not all of his early-day investments turned out to be as successful, it was during this period that he was able to experiment with markets, learn from mistakes and carve out a winning formula.
He said: “Thames Water was one of many privatisations of the late 1980s, in which the government was practically giving away money. There were not many privatisations back then that lost money, so that investment turned out to be successful, although I had plenty that were not as successful, which I learnt from. In those days I learnt a lot about the importance of how cash is generated.”
Mr Moore eventually went on to study economics at university, where he came across his greatest career influence, John Maynard Keynes’ General Theory of Employment, Interest and Money, a book he cited as highly significant and still relevant to investment markets today. Armed with a strong interest in finance and a university degree, it did not take long for him to secure a place on Schroders graduate programme in 1998, which marked the beginning of his long-awaited career in the investment universe.
His four years at Schroders were mostly characterised by the tech boom, a defining series of events that saw numerous investors lose millions. A young Mr Moore watched and observed as his peers were swayed by market sentiment, and in the process learnt an important lesson that would shape his index- and macro-agnostic approach to investment management.
He said: “It felt like the Wild West. Each day you would come into the office and feel the fear. It showed me that benchmarks could be a very dangerous thing. I witnessed first-hand examples of deals being taken that would later be regretted, and as stocks were getting bigger in the index, it was getting more painful not to own them. Those who did not buy them showed a real strength of character.”
Now the manager of Standard Life Investment’s UK Equity Income Unconstrained Fund, Mr Moore explained that his success in the past five years was down to his determination to stick to his guns and be different. Since taking over the reins during the recession in January 2009, the fund has produced top-decile performance across six months, one, three and five years, returning 169.2 per cent to investors versus the peer group average of 96.1 per cent.
On achieving successful returns during the economic turmoil he spoke of a handful of investments that went completely against market sentiment, such as his refusal to buy into the consumer staples craze in 2011. Instead, he invested in companies like easyJet, which Mr Moore and his team took an interest in when “people were not into airlines”.
He said: “Part of the success was that we were willing to be different. We listened to companies on the ground and were not swayed by macro noise. It takes some nerve to hold your own and buy more shares and we stuck to our guns and continued to select winners whenever we had our convictions. We directed our attention away from sentiment and looked at the potential and underlying issues.”
The key to being a good fund manager, according to Mr Moore, is looking for companies that are underappreciated and unloved from a sentiment perspective and not getting carried away when markets go crazy. This approach means he rarely invests in large-caps, where undervalued stocks are harder to find, and pays no attention to benchmarks.
He added: “I think there is a comfort from following an index. From a career point of view it is certainly a less stressful way to manage money. But if you are paying an active fee you would expect more than a median return. The whole point of active investments is to generate a return higher than the index.
“A lot of UK equity income portfolios are doing exactly the same thing. According to the IMA, 92 per cent of funds own GlaxoSmithKline. It is a big holding for the vast majority of funds but we do not own it because we think we can do better elsewhere. Holding a basket of stocks like this will see performance that does not deviate much from the index.”
But despite taking a slightly different approach during his so far successful five-year tenure, Mr Moore, like many of his UK equity income peers, has found himself overshadowed by the presence of Neil Woodford, the sector’s big name fund manager. Whereas some may find a lack of industry recognition frustrating, the Standard Life Investments man shows no signs of bitterness.
He said: “What I am interested in is our total returns. If people look beyond reputation and headlines they will see a five-year track record and they can compare and contrast it, then select where to go.”
Daniel Liberto is features writer at Financial Adviser
Career ladder
2005-present
Standard Life Investments, investment director. In 2009 he became manager of the UK Equity Income Unconstrained Fund
2002-2005
Standard Life Investments, investment analyst
1998-2002
Schroder Investment Management, assistant fund manager, UK equities. Subsequently appointed investment analyst, emerging markets
1994-1998
BA in economics and politics, Exeter University
