M&G Global Basics Fund

Morningstar state “Randeep Somel has a very good understanding of the stocks in the fund, but he has yet to prove himself as a portfolio manager.”

The M&G Global Basics Fund is somewhat of a wounded star. The fund was launched in 2000 with the concept being to invest in the ‘building blocks’ of the word’s economy.

After a relatively strong period of performance, it started to slip. From 2006 to November 2013 the fund started to significantly underperform the FTSE World Index. This underperformance eventually led to the fund manager leaving M&G in November 2013 and retiring from Fund Management. At the time the fund had over £4.2 billion of assets and this has slipped to £2.5 billion.

The fund management was passed to Randeep Somel who had worked with Graham French (the founder of the strategy and previous manager) since 2005 becoming a dedicated analyst on the fund in 2008 and deputy manager in 2010. This is effectively his first management role and since 2013 the fund has continued to underperform the index.

With this background it is very hard to be positive about this fund. However, there is something for potential investors to consider. Firstly any new fund manager will take time to stamp their style on the management of the fund and therefore for this to come through into the performance, and secondly as French admits he felt it was time for fresh blood to come in.

The point being is that this fund has the potential to deliver, the past paints a very gloomy picture and Randeep has a chance to reverse that. It is a risk for investors, and potential investors must have a belief in him. The problem is that there is no track and so it is a case of believing in the process and pure blind faith! The fund assets have nearly halved since he took over the management of the fund and therefore it shows that many are not prepared to back Randeep.

In this update we will share some of the thoughts from Randeep and potential investors will need to consider whether this is enough to consider this fund as part of their portfolio.

Fund Facts Morningstar


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