Mark Costar, der schon seit vielen Jahren erfolgreich für JOHCM tätig ist und zu unseren ausgewiesenen Stockpicking-Experten gehört, sucht nach fehlbewerteten beziehungsweise unentdeckten Wachstumswerten, die typischerweise in eine von drei Kategorien fallen: klare, unangefochtene Marktführer, (disruptive) Erneuerer und Nutznießer von Entwicklungen auf der Angebotsseite. Der Fonds tendiert zur Übergewichtung kleinerer Werte. Bevorzugt werden Titel mit großer Sicherheitsmarge und zugleich erheblichem Kurspotenzial.

The FTSE All-Share Total Return Index (adjusted) returned -5.94% in June in a tough month for stock markets globally, with robust economic data, particularly in the UK and the US, ultimately overshadowed by larger events elsewhere. Greece's debt crisis spiralled downwards, while, perhaps more ominously, evidence that the Chinese economic miracle is long since over continued to emerge. 

Financial markets need to encounter and overcome obstacles if they are to progress; positive returns are made as risk dissipates. Typically it is not the big and obvious risks looming large in front of investors that cause prolonged or meaningful dislocations, but the ones that few people have thought about. The stock market has had four years to prepare for a Grexit; no-one has trusted Chinese data for years; and the imminent interest rate rise in the US must be the most discounted and debated event in stock market history. Yes, the scale and magnitude of any of these things could cause a further market wobble, but, absent that, it is far more likely that only a left-field risk could de-rail what is actually a pretty encouraging environment, with companies hiring and looking to invest, consumers' purse strings starting to loosen and M&A activity picking up considerably.

 

Whilst the Fund was inevitably caught up in the market sell-off, it did nevertheless materially outperform in returning -3.00%. As foreshadowed last month, the principal contributor to this outperformance was our small cap exposure. Furthermore, this came from a pleasing mix of excellent results (e.g. Carpetright, First Derivatives), encouraging strategic progress (NetScientific, Sigma Capital) and corporate activity (Aga Rangemaster, Promethean World). 

The return of takeovers in the UK small cap space is something we have consistently argued would happen. In many instances, the stock market continues to accord derisory valuations to fundamentally attractive businesses with excellent growth prospects. This anomaly can only persist for so long before it is corrected, either through steady and persistent re-ratings or takeovers. Both Aga and Promethean are separately in talks that may or may not be consummated via transactions, but, either way, this shines a light on the prevailing undervaluation clearly evident in small caps. Having already benefited from Optos's acquisition by Nikon earlier in the year, such events are not a coincidence, and if markets continue in their current vein, we would be very surprised if they are not followed by more.

A GBP
B GBP
xx EUR - Non Dist X		xx EUR Hedged
xx USD - Non Dist X		xx GBP X

 

JOHCM/FTSE Group/Bloomberg/Lipper. Data shown net of fees, net income reinvested. Performance of other share classes may vary and is available on request. Please note that all fund performance is shown against the FTSE All-Share TR Index in GBP. Where shown, monthly returns table shows compounded discrete monthly performance. All performance figures illustrate performance from the first full day that the Fund held investments.

Industry Classification Benchmark (“ICB”) is a product of FTSE International Limited (“FTSE”) and all intellectual property rights in and to ICB vest in FTSE. J O Hambro Capital Management Limited has been licensed by FTSE to use ICB. “FTSE” is a trade mark of London Stock Exchange and The Financial Times Limited and is used by FTSE under license. FTSE and its licensors do not accept any liability to any person for any loss or damage arising out of any error or omission in ICB.