M&G Recovery Fund

A history of award-winning growth

23 May 2009 marked 40 years since the launch of the M&G Recovery Fund 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 in these 40 years 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.

Visit our dedicated website to find out more about the Recovery Fund 40th anniversary.

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

The M&G Recovery Fund, launched in 1969, doesn’t follow stockmarket trends; rather, it focuses on the performance and potential of individual companies – companies facing challenges but with long-term potential, which has not yet been spotted by the market.

Citywire AAA* rated fund manager Tom Dobell has spent the last 10 years seeking out and investing in such 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 as Tom works closely with the management once invested in the company. 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.

For more information about the M&G Recovery Fund and the recovery cycle in practice, please visit our dedicated website at www.recovery40.co.uk

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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 AAA* 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 15.7% throughout its 40 year history, compared with a return of only 11.0% for the FTSE All-Share Index for the same period.
• The Fund is ranked in the top 25% of the IMA UK All Companies Sector, over the past year, and in the top 10% over the past 2, 3, 4, 5, 6, 7, 8, 9 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 40 years ago.
• Tom Dobell, manager of the fund since March 2000, has over 18 years of investment experience.
• Tom is the longest standing Citywire AAA* rated fund manager, having held the rating for 56 consecutive months**.
• 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 75.4% over five years, outperforming its sector, the IMA UK All Companies Sector, by 35.4%.
• Over 10 years the fund returned 84.4% outperforming its sector by 59.8%.
• Since Tom Dobell began managing the fund in March 2000, he has achieved a return of 94.4%, outperforming the sector by 63.8%.

Please remember that you should not base decisions on past performance, prices may fluctuate and you may not get back your original investment. Overseas shares may be affected by currency exchange rates.

Source of all performance figures: Morningstar Inc., and M&G Statistics, bid to bid, net income reinvested, Sterling Class A Shares as at 31 December 2009.

*Citywire rating as at 31 December 2009 and should not be taken as a recommendation.

** Source: Citywire, as at 31 December 2009.

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