M&G Recovery Fund

A classic UK equity fund that’s as attractive as it’s always been.

The M&G Recovery Fund was launched in 1969 as a vehicle for investors to grow their long-term savings. Today it is one of the largest and most successful funds of its type in the UK.

Much in our economy has changed since then and the investment climate has varied enormously. Throughout this time the fund has remained steadfastly committed to helping private investors grow their savings through selected exposure to the UK stockmarket.

Investment strategy

The recovery cycle

Fund objective and policy

About the fund manager

Why choose the M&G Recovery Fund?

How has the M&G Recovery Fund performed?

Investment strategy

Throughout its 41-year history, the fund has stood by the same approach – to identify struggling companies that have the potential to make a full recovery, and to work closely with them until they have returned to growth.

Citywire AA* rated fund manager Tom Dobell has spent the last 10 years seeking out and investing in companies with solvable or transitory problems, such as those that are financially stretched, or which have a strong market position, but need a change in strategic direction. In-depth analysis is used not only to determine which companies show real promise but also to help them realise their full potential. In times of market uncertainty, it could pay to consider this tried and tested investment strategy.

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The recovery cycle

The fund looks at the recovery process as a four-stage cycle as shown below.

Companies are usually held throughout the cycle, for example, some may be in difficulty and unloved by the market, while others are completing their recovery.

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Fund objective & policy

The Fund predominantly invests in a diversified range of securities issued by companies which are out of favour, in difficulty or whose future prospects are not fully recognised by the market. The sole aim of the Fund is capital growth. There is no particular income yield target.

Products available: ISA, OEIC & Savings Plan

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About the fund manager

Citywire AA* rated Tom Dobell joined M&G in 1992 as a UK equity manager on the segregated pension fund desk where he was responsible for managing assets for 16 pension fund clients. In March 2000, Tom became fund manager of the M&G Recovery Fund. Before joining M&G, he worked for Phillips & Drew (PDFM) as a fund manager within the charity and small pension fund division. Tom graduated from agricultural college in 1986.

In addition to the fund data that can be found by accessing the menu to the left of this page you may also wish to read the fund Key Features (3 MB) which contains further fund information.

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Why choose the M&G Recovery Fund?

• The M&G Recovery Fund is focused on corporate and not economic recovery – a strategy designed to seek out investment opportunities whatever the market conditions.
• It has a proven and unchanged philosophy of investing in unloved and undervalued companies.  
• The fund was launched in 1969 and has achieved an average annual return of 15.3% throughout its 41 year history, compared with a return of only 10.7% for the FTSE All-Share Index for the same period.
• The Fund is ranked in the top 10% of the IMA UK All Companies Sector over the past 5 and 10 years.
• The strategy behind the M&G Recovery Fund is one of consistency – the fund has only ever had three managers at the helm since its launch over 40 years ago.
• Tom Dobell, manager of the fund since March 2000, has over 18 years of investment experience.
• Tom also benefits from the support of an experienced, hands-on corporate finance team, working closely to develop and maintain a constructive, two-way dialogue with the companies in which he invests.

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How has the M&G Recovery Fund performed?

• Under Tom Dobell’s management it is the only fund in the IMA UK All Companies sector to have outperformed the FTSE All-Share Index every year for the last ten calendar years.
• The M&G Recovery Fund has achieved a return of 52.2% over five years, outperforming its sector, the IMA UK All Companies Sector, by 27.2.
• Over 10 years the fund returned 89.2% outperforming its sector by 54.7%.
• Since Tom Dobell began managing the fund in March 2000, he has achieved a return of 94.3%, outperforming the sector by 59.0%.

Please remember that you should not base decisions on past performance, prices may fluctuate and you may not get back your original investment.

Source of all performance figures: Morningstar Inc., and M&G Statistics, bid to bid, net income reinvested, Sterling Class A Shares as at 30 July 2010.

*Citywire rating as at 31 July 2010 and should not be taken as a recommendation.

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