Powering a recovery fund in a recovered market

Powering a recovery fund in a recovered market

With markets on the way up, finding unloved and undervalued stocks is becoming harder. But one recovery fund has managed to return over 20% since its launch last year. Hardeep Tawakley speaks to Hugh Sergeant, manager of the River and Mercantile World Recovery fund.

With developed markets’ recovery well under way, the concept of a global recovery fund seems ill-timed. Recovery funds are known to be cyclical. So while they are able to significantly outperform their peers over the long term and when markets are in turmoil – for example, over ten years the M&G Recovery fund has returned a whopping 159% to 20 May 2014 – in the short term, their high risk strategies can expose their downfall. Over the past year the M&G fund has returned 1.8%, and even over three years it has returned below the FTSE 100 index. However, there are some recovery funds ...