Clerical Medical UK Growth

By THIS IS MONEY
Updated:

 

LIFE AND pension companies are not renowned for producing strong investment products, but Clerical Medical's UK Growth open-ended investment companies (Oeic) fund is a clear exception to the rule.

It is run by Mark Costar, who aims to provide consistent, controlled growth whatever happens in the wider economy. Costar joined Clerical Medical as an analyst in 1992 and in July will have run the UK Growth fund for five years.

In the three years to 28 March an investment of £1,000 would have turned into £1,231 after all charges. In contrast, the average UK all-companies fund would have turned the same stake into £1,016.

The fund is available for Isa investments and Pep transfers. The initial charge is 3.25% through either of these routes and the annual fee is 1.25%.

Financial Mail: What should investors in UK equities be doing in the present volatile market conditions?

Mark Costar: I feel that the market is actually throwing up opportunities to buy attractive business franchises at sensible prices. Investors should consider investing in these companies or in funds that give balanced exposure to them.

FM: Is yours a high-risk and high-reward portfolio?

MC: Not really. Because we invest in so many opportunities in different sectors, we get some natural balance.

FM: What prompts you to sell a holding?

MC: I always sell on corporate disappointments or significant changes of strategy. If a management can't make up its mind where a business is going, I can't see how investors can, either. That is the time to get out.

FM: Do you prefer large or small companies?

MC: The trust is biased towards growth opportunities, and historically this has led it to be overweight in the mid-cap area, where we have found a number of fertile opportunities.

FM: Is Britain going into recession?

MC: I don't think Britain will be immune to the slowdown in America. But interest rates still have scope to come down, and with inflation low, we believe a modest correction in growth is more likely.

• Clerical Medical 0845 777 2233.

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