UK Value MPS
UK Value Managed Portfolio Service
The MPS seeks to own stakes in established companies quoted on UK stock markets, in particular investing in neglected, under-priced shares. Following thorough analysis of the underlying business the shares are only bought when the market price is significantly less than intrinsic value, thus providing reassurance on the downside risk.
Bridges are not designed merely to just withstand adverse circumstances but have extra strength built-in; similarly shares should not be chosen that are just safe enough, a good margin of safety is required.
Strict adherence to the investment criteria means there are a limited number of suitable companies at any one time, so the portfolio generally consists of between 16 and 25 shares. We do not diversify to mediocrity, wanting the best not the most.
Dr Glen Arnold
Client portfolios hold the same shares as Dr Arnold’s personal portfolio. Glen is a member of the Investment Committee and is renowned for his authoring the following books:
The Financial Times Guide to Investing, The Financial Times Guide to Value Investing, The Deals of Warren Buffett: Vol 1: The first $100m, The Deals of Warren Buffett, Vol 2: The making of a billionaire; The Deals of Warren Buffett, Vol 3: The making of America’s largest company, The Great Investors, Get Started in Shares, Corporate Financial Management, Modern Financial Markets and Institutions, Essentials of Corporate Financial Management, The Financial Times Handbook of Corporate Finance, The Financial Times Guide to Financial Markets, The Financial Times Guide to Banking, The Financial Times Guide to Bond and Money Markets.
What Is A Managed Porfolio Service?
Clients’ individual portfolios are managed by Dr Glen Arnold, who uses his own share portfolio held at Henry Spain as a model for the proportions put into each investment company.
So, for example, Dr Arnold’s portfolio might have 5% allocated to Company X and 6% to Company Y, and so on. This is the “model”. Ideally, all clients’ portfolios will have precisely the same percentages, but because people have joined the service at different points or because attaining precision would cost the client too much in transaction charges a rough similarity to the model is targeted. Thus Client A might have 5.5% in Company X and 5.9% in Company Y.
What Is Dr Arnold’s Investment Approach?
Glen is a deep value investor, constantly on the search for overlooked, out-of-fashion and under-valued companies. These shares can frequently be picked up at a price significantly less than intrinsic value, allowing out-performance relative to the stock market in subsequent years.
Dr Arnold has studied, taught and practiced deep value investing both at university, in the City and from the quiet of his study in Leicestershire for four decades. He has also written many books on the subject including the UK’s best selling investment book. He is a renowned expert on the great American investor Warren Buffett (Glen has written some books on his methods too).
Will My Money Be Put Into Other Stuff, Such As Derivatives?
The only investments held in the portfolios managed by Dr Arnold are shares in UK companies quoted on the London Stock Exchange. At any one time, a portion of the portfolio value will be in cash.
But that’s it, just UK shares and cash. No derivatives, no commodities, no bonds, nothing fancy or confusing; just good solid British companies making things in the UK or providing a service, with HQs in the UK.
We have some excellent companies here in Britain, it’s just that sometimes Mr Market pushes down their share prices through neglect or irrational fear and ignorance, to prices that we at Henry Spain think are bargains. So we buy them.
Am I Protected?
Henry Spain is fully regulated by the Financial Conduct Authority. Raymond James, the broker carrying out the buy/sell orders, is also fully regulated here in the UK by the Financial Conduct Authority. Your portfolio is ringfenced in your account so no one can take shares or cash from it, other than you.
How Do I Find Out What Is In My Portfolio?
- Quarterly reports. These will show the value of your portfolio, its holdings and transaction costs. There will also be some comments from Dr Arnold.
- Annual Reports. Apart from showing performance, holdings and costs this will sum up the progress of the portfolio over the year with a commentary on what worked well and a review of lessons for the future.
- Access to account online. The investments contained within your portfolio are valued daily and you can view both the shares and their current values within your dedicated online client site (prices from the previous evening).
Can Anyone Hold A Managed Portfolio Service Account At Henry Spain?
We need to ensure that deep value investing in UK shares is suitable for you; we ask, given your circumstances and commitments, is it wise to devote such a large sum of money to equity investment? This suitability check can be carried out by your own financial advisor if you have one. If not, then one of Henry Spain’s financial advisors will be glad to offer that service.
Our watchword at Henry Spain is always to do right by the client, and sometimes this will mean saying that the Managed Portfolio Service is not the right road to go down, at least not at that time – perhaps when other issues in your financial profile have been resolved (e.g. mortgages, life insurance, rainy day money savings, tax shelters, etc.) then the financial advisor will point you in the direction of the Managed Portfolio Service.
The Key Risks To Consider Before Investing:
- Risk to Initial Capital: There is no guarantee that the capital will be protected given this 100% equity strategy.
Given the potential risks these investments should only be considered in specific circumstances and would not be suitable to all investors. To speak to one of our advisers about whether this solution would be suitable for you, contact us today.