Fund Manager Focus – Neil Veitch, SVM UK Opportunities fund
We prefer managers who have proven track records of persistently delivering above average returns over time. If a manager can out-perform more often than not in the short term and we hold their fund over the long term, the chances of it delivering strong returns for our clients is high. It is the compounding of these excess returns year after year that truly generates wealth creation, not trading in and out of funds in the hope that one area of the market is going to do better than another.
By focusing on the long term and not letting short periods of underperformance dictate our choices, we can select funds that follow various styles and strategies, with different drivers of returns, at different times in the investment cycle. This means we can diversify our models without diluting longer-term performance.
Neil Veitch joined SVM in January 2006 to manage their UK Opportunities fund, which he is still in charge of today. Focusing on medium and small sized companies with an investment process that has a value bias, Veitch’s approach differs from his peers. Since taking charge of the fund, he has returned 301.27% compared to 161.47% for the sector average*.
More impressively, of the 16 calendar years of his stewardship, the fund was listed in the top quartile of its peer group eight times. And interestingly, over those years, he has also underperformed seven times.
Our reviews of his fund management each time concluded that he hadn’t become a bad manager and his investment decisions were still good. It was more that his investment style and positioning was out of favour. This gave us the confidence to continue to support him with our clients’ money.
Value as a style has been out of favour for a few years, with a number of value-focused strategies under-performing the wider market. Despite this, in Veitch we have a manager who has delivered strong relative numbers and gives us exposure to different companies than our other UK equity choices.
* Source: Financial Express Analytics, Total Return, Bid to Bid, GBP£, 23rd January 2006 to 5th January 2022