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How Mark Slater is bouncing back - and why his income fund is flying

by David Campbell on Dec 13, 2013 at 07:18

How Mark Slater is bouncing back - and why his income fund is flying

Mark Slater had a pretty good recovery. Between December 2010 and February 2012 he was Citywire AAA-rated in 11 out of 15 months and AA-rated for the remainder.

Following a spectacular run between 2009 and 2011 when he comprehensively beat his peer group on both total and risk-adjusted returns, things  began to falter. The manager then trailed the competition through 2012 up to the middle of this year.

Things have begun to turn around. Over the short term he appears to be making a good start on regaining some of his old sector-beating ways, with his MFM Slater Growth and Recovery funds ranking fourth and fifth out of the 288-strong Equity UK All Companies peer group on a three-month basis.

But the damage still lingers. Over three years his MFM Slater Growth fund is ranked 91st out of 265 funds. Even over the past year the fund sits at 218th out of 279. Meanwhile, over the past three years, his Recovery fund is ranked 259th out of 265 funds.

So what went wrong?

‘We were punished for not holding value,’ says Slater. ‘It’s not really an area that we have a lot of interest in. Almost from the moment when [European Central Bank president] Mario Draghi stood up and delivered his “whatever it takes” speech, value rallied to the exclusion of growth.

‘Things have now calmed down and this year there has finally been a recognition that growth is cheap, which is one of the reasons we have [recently] performed much better.’

Life after Draghi

The picture is a little more nuanced than this, however. Two years of exceptional performance actually came to an end in July 2011, as world markets plunged on the eurozone crisis. This was a full year before Draghi pledged to support member state sovereigns with cash.

‘We also suffered from our mining exposure and a couple of special situations holdings in 2011 when we lost something like 7% [over the calendar year]. We have got rid of pretty much all of that now and have increased the overall level of quality across the funds,’ Slater says.

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