With almost 500 shares, this fund might look like a closet index tracker. Fund manager Ian Heslop says that in fact it is a high-conviction portfolio. The active share, or performance derived from its active bets, is about 80% — and 90% of this is from stock selection. Heslop says there is no macroforecasting. Instead, the portfolio is driven by six factors: dynamic valuation — value, dynamic valuation — quality, sustainable growth, analyst sentiment, company management and market dynamics. This provides a diversified source of alpha (excess return). But Heslop insists this is not a smart beta fund. The factors are dialled up and down. In fact, value and growth have both had the lowest rating overall since the fund was started in 1994, and market dynamics and analyst sentiment have had the highest rating.
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