Andy Parsons, advice team manager at The Share Centre, explains how investors looking for global exposure to companies with a focus on primary and secondary industries, could benefit from the M&G Global Basics fund.
 
With the aim of achieving long-term capital growth, the M&G Global Basics fund focuses on investing in companies that cover key sectors like utilities, energy, raw materials, industrials, consumer basics and commodities and that are seen as the building blocks of the World’s economy.
 
Providing investors have the appetite for risk and are seeking global exposure, the fund will also help with portfolio diversification of assets, regions and sectors. However, investors should be aware of the risks associated with global companies such as supply and demand factors, political risk and currency factors.
 
The fund is managed by Graham French, who also manages the M&G Managed Growth fund. French predominately operates a bottom-up approach with regard to stock picking. He actively seeks out those companies exhibiting key characteristics such as a strong competitive edge, sustainable market share, proven business models, financial strength and that overall are perceived as undervalued.
 
The fund typically invests in 40-to-80 companies with an average holding period of at least four years, with the top 10 holdings each making up between 3-to-5 per cent of the overall portfolio. As of December 2009 the fund’s top five holdings included: Tullow Oil, Lonmin, Eramet, Unilever and Sims.
 
Over the last five years the fund has achieved an impressive return of 89 per cent and is rated AA by both S&P and OBSR.