The F&C Enhanced Alpha UK Equity Fund, one of the first so-called 130/30 funds to focus on UK equities, has reported its sixth consecutive month of beating the market since it was launched in August last year.
Despite turbulent financial markets funds, the F&C Enhanced Alpha UK Equity Fund has outperformed the FTSE All Share Index by 4.21% during its first six months.
While more than 80% of enhanced alpha funds launched in the US are believed to follow quantitative models, the F&C Enhanced Alpha UK Equity Fund further distinguishes itself from the crowd by following a fundamental stock-picking approach.
The managers of the F&C Enhanced Alpha UK Equity Fund are Peter Lees, F&C's Head of UK Equities, and Michael Ulrich, Associate Director, UK Equities. Lees has overseen a significant turnaround in F&C's UK equities performance since arriving at the company at the end of 2005, including the development of its strong institutional UK high alpha product.
The great thing about this fund is that it enables us to make more efficient use of information than a traditional fund, Lees said. As fund managers we constantly take views on which companies will do better than the market and which will do worse. However, in a conventional equity fund the only way you can express a view on those shares that you believe will perform poorly is either to go underweight or not hold them at all, so the value of that information is not fully exploited to the benefit of investors.