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Marlborough Multi Cap Income

Elite Rated by FundCalibre

The Marlborough Multi Cap Income fund ventures into the small-cap space where other income funds fear to tread. It aims to combine fast dividend growth with capital appreciation. The acclaimed stock-picking ability of the Hargreave Hale team has led to significant outperformance since fund launch in July 2011.

Company Description

Marlborough Fund Managers Ltd offers investments across various asset classes, ranging from UK Fixed Interest to International Equities and Exchange Traded Funds (ETFs). Holding the Elite Provider for Equities Rating, managers are hand-picked and given freedom to invest as they feel optimal in the fund’s sector.

Hargreave Hale, who are investment managers for some of Marlborough’s funds, are a merger of Hargreave Investment Management and Hargreave Hale & Co, the former having been founded in 1986. The CEO of Hargreave Hale stepped down in 2014 to focus on fund management.

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Fund Manager

Siddarth Chand Lall manages this fund alongside Giles Hargreave. Siddarth joined Marlborough in 2007, having previously worked as a pan-European small and mid-cap specialist. He has 10 years’ buy side experience. Giles has a wealth of experience having started his career in 1969, and is known for his aggressive style and his ability to adapt to changing market conditions.

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We believe in the power of compounding growth in dividends especially in the small and mid cap sector, which is now offering an attractive combination of growth and income.

Giles Hargreave - Fund Manager

The Investment Process

The fund invests in a combination of FTSE 350 companies and much smaller companies. The fund’s premise is that smaller companies outperform. The managers source ideas from their team and a network of brokers. They study financial statements and use models to test the sustainability of dividend payments. Management meetings are key, and 65% of the fund is in stocks with a market cap of less than £1bn. Stocks are constantly re-assessed and sold when there is potential for the dividend to be compromised.

Risk

The fund invests in much smaller companies than its peers, investing in a large number of stocks to ensure it is well diversified. Despite investing in smaller companies, volatility has typically been lower than most peers over the past three years.

Our Opinion

A well-resourced fund which offers something radically different from the majority of large-cap FTSE 100 income funds. This well structured team will likely continue to take advantage of small-cap opportunities, which other managers and brokers ignore. The team are renowned for their experience in this area of the market.

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