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Dobell: behaviour has at last begun to change
by Dylan Lobo on Mar 15, 2012 at 08:03
M&G Investments' Tom Dobell has faced one of the biggest challenges in his career in the turbulence, but his conviction in his investment process has not been shaken.
In his M&G Recovery fund review for the second half of 2011, Dobell gave the impression he was feeling more upbeat about the market despite there being no 'obvious solution' to the economic woes which afflict the world.
Citywire A-rated Dobell (pictured) said: 'The mountains of debt accumulated by governments and consumers alike on both sides of the Atlantic will take a long time to unwind, in our view, and we are probably only partway through an extended period of adjustment. Behaviour is at last beginning to change, however, and we find this development more encouraging.'
He added: 'Despite the uncertainty that looms ahead of us, we are extremely optimistic about the prospects for he M&G Recovery fund.'
Dobell, a renowned bottom-up stockpicker, accepts he is no economist but believes the by-products of increased short-termism among investors amid the gloom creates a number of opportunities for his seasoned long-term approach.
'In an age when investors are increasingly short-sighted, we can afford the luxury of time and we have not veered from our long-term approach. The past three years has been a particularly busy time for us as the global financial crisis presented opportunities and about a third of the fund has been refreshed during that time,' he said.
'This is the source of our optimism. We are hopeful that these new ideas, coupled with the greater backing of some of our existing holdings, will fulfil their potential and drive fund performance over the next three to five years.'
The weak links
In the 12 months to the end of February the Citywire Selection M&G Recovery fund managed to eke out a gain of 4.1%. While this may not look spectacular, it is impressive against the 1.53% rise in the FTSE All Share over the same period.
Over three years the fund fares more favourably with a return of 88.9% some 14% higher than that of the benchmark.
Copper producer First Quantum Minerals and sand minerals producer Kenmare Resources were two of the biggest let downs in the second half of the year as they returned the gains they made in the first half. However, both stocks remain key long term holdings for Dobell.
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