Best In Class  

Best in Class: Marlborough Special Situations

Generally these stocks are less well covered by sell side analysts and availability of information is somewhat constrained.

The team use their macro views to discount large numbers of these stocks and sectors before they then cover the vast bulk of remaining companies through meetings and remote analysis.

The fund typically holds around 200 companies and this diversification helps somewhat to mitigate the risks associated with investing in smaller-sized businesses.

Relatively small positions are usually taken initially. Holdings may then be ‘averaged up’ as the team becomes more comfortable with a company and the management delivers on its plans.

Conversely, they will typically cut losers more quickly, rather than ‘averaging down’.

Throughout its history, returns for this fund have been nothing short of exceptional and the team has consistently added a huge amount of value through stock selection. I see no reason why that may not continue to be the case.

Darius McDermott is managing director of FundCalibre