‘We like Ama­zon as it’s hard to repli­cate’

The Daily Telegraph - Your Money - - INVESTING FUND OF THE WEEK -

Global funds have the ad­van­tage of be­ing able to jump be­tween dif­fer­ent com­pa­nies, in­vest­ing in those where they think the great­est growth will be. At a time of geopo­lit­i­cal un­cer­tainty, amid a new Amer­i­can Pres­i­dent, fears of emerg­ing mar­ket growth, Bri­tain’s Brexit ne­go­ti­a­tions and loom­ing elec­tions across Europe, this could be an ad­van­tage.

How­ever, Louise Keel­ing, man­ager of the RWC Global Hori­zons fund, said she is not con­cerned where a com­pany is based but only with how the stock will per­form over the long term. Her fund launched just over three years ago and has £110m in as­sets, mak­ing it smaller than many ri­vals.

Ms Keel­ing talks about get­ting a “Trump bump”, why Ama­zon’s busi­ness is near im­pos­si­ble to repli­cate – and why you should buy Lloyds now.

How do you in­vest?

We are su­per long term. A lot of fund man­agers in­vest based on one-year per­for­mance, be­cause that ties in with their per­sonal com­pen­sa­tion. But we want to in­vest in busi­nesses that ex­hibit long-term char­ac­ter­is­tics for growth – we are own­ers rather than renters of com­pa­nies.

We are com­pen­sated on a rolling five-year ba­sis, so that means we can ben­e­fit from the short-term na­ture of other in­vestors.

We are look­ing for com­pa­nies trad­ing at a frac­tion of their in­trin­sic value. I don’t want to over­pay for a car, a house or an in­vest­ment in a busi­ness.

Ama­zon is your largest hold­ing. Why?

We have held Ama­zon since the fund’s in­cep­tion over three years ago.

Ama­zon has suc­ceeded in part be­cause it shares its economies of scale and bet­ter pur­chas­ing power with its cus­tomers.

This now means it’s very dif­fi­cult, and would be ir­ra­tional, for some­one else to come in and recre­ate what Ama­zon has got, as they can’t pro­cure at the prices that Ama­zon sells at.

In the first year of us hold­ing it Ama­zon was our worst-per­form­ing stock but we felt that the in­vest­ment case was in­tact, so we added to it at be­low $300 a share and it be­came our top per­former.

You also have Lloyds in the port­fo­lio. Why do you think its shares will rise?

Lloyds is a good ex­am­ple of what we favour in fi­nan­cials, which is large sin­gle banks. Since the global fi­nan­cial cri­sis there has been a penalty for com­plex­ity.

Be­cause Lloyds is so large in the mort­gage sec­tor, it has economies of scale in that busi­ness, so it should be in a very strong po­si­tion to con­tinue to lead that mar­ket.

At the mo­ment you are pay­ing about the value of the com­pany’s as­sets and so we’re not pay­ing any­thing for the po­ten­tial growth in the busi­ness. If it is a tougher UK econ­omy, it will be more in­su­lated than others.

Where do you see op­por­tu­ni­ties, ge­o­graph­i­cally, in the cur­rent mar­ket?

It’s all about find­ing great com­pa­nies, we don’t care where they are. We have been over­weight on Amer­i­can com­pa­nies, which has been very dif­fer­ent to many global funds – but that is be­cause we hap­pen to have found a lot of in­ter­est­ing op­por­tu­ni­ties in the US, not be­cause I’m mak­ing a big call on the US.

While some fund man­agers fo­cus on the short term, Laura Suter speaks to one who in­vests ‘su­per long-term’

You have 61pc of the fund in­vested in Amer­ica. What im­pact will Don­ald Trump’s pres­i­dency have on your port­fo­lio?

We own more “cycli­cal” com­pa­nies, those that are more sen­si­tive to the econ­omy, that we feel have been un­fairly pe­nalised.

What we’ve seen with the Trump bounce in the mar­ket, is that peo­ple have be­come more open to think­ing that, if there is fis­cal stim­u­lus or a fun­da­men­tal eco­nomic bounce in the US, these busi­nesses could ben­e­fit.

What would you have done if you hadn’t be­come a fund man­ager?

I started at the Bank of Eng­land on the grad­u­ate pro­gramme, so early-20s me would have ended up in de­vel­op­ment eco­nom­ics or stay­ing at the Bank. But, as for 44-year-old Louise, I would now be a stay-at-home mum, al­though I don’t think my chil­dren would like that par­tic­u­larly.

Do you have your own money in the fund?

Yes, all my liq­uid wealth. How to buy the fund as cheaply as pos­si­ble

The trust has a to­tal cost (the “OCF” or “TER”) of a year. Be sure to buy the right “share class”, which is “A”. The in­vest­ment shop through which you buy the fund will also levy a charge. Some will charge


a per­cent­age of the amount in­vested, others will ap­ply a flat an­nual fee. Our colour coded ta­bles at

tele­graph.co.uk/ in­vest­ing

will guide you to the cheapest fund shop for your cir­cum­stances.


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