Stocks in Focus: Franklin UK Mid Cap Fund


Wednesday 11 July 2018



This week NW Brown are looking at Franklin UK Mid Cap Fund, a fund which focuses on investing in what the managers believe to be the best investment opportunities in the FTSE 250 index.

Companies listed in this index are generally between 700m and 5bn in size. The manager has a strict discipline and will not hold any investments within the portfolio that are not a part of the index. The FTSE 250 is reviewed quarterly to see which companies have made the move up to the FTSE 100 or down to FTSE Small Cap index.

The fund is managed by Paul Spencer, Mark Hall and Richard Bullas, who look to identify companies with strong balance sheets that are trading at reasonable prices, for long-term investment. They specifically target this part of the market due to long-term outperformance vs larger companies (over five, 10 and 20 years), the diversification across sectors and the balance of UK vs overseas earnings (approx. 52% vs 48% respectively).

In a recent meeting Paul Spencer highlighted that concerns over Brexit have caused a significant divergence in the valuation of companies that generate earnings from overseas compared to more domestically focused names. They feel this gap has now become too large and are recycling some cash out of the top performing stocks into some of the more unloved companies which have been identified as good value.

Remaining focussed on quality companies and doing their own in-depth valuation assessments and growth forecasting has proved successful for the team, with annualised performance of 12 per cent against 10 per cent for the index. However, when investing into this area investors must be aware of the higher volatility associated with medium and small cap companies, and that historic out-performance does not offer a guide to future returns.




Forthcoming Events

January 7 2019 / 5.00-7.00pm
Informal Networking Evening Huntingdon
January 14 2019 / 5.00-7.00pm
Informal Networking Evening Ely
January 16 2019 / 5.00-7.00pm
Informal Networking Evening Peterborough
January 17 2019 / 5.00-7.00pm
Informal Networking Evening Cambridge
January 22 2019 / 7.45-10.00am
Cambridge Safari Business Breakfast
January 23 2019 / 5.00-7.00pm
Informal Networking Evening Fenland
January 24 2019 / 4.00-7.00pm
Beer Tasting and Networking - Ely