RLAM's UK Special Situations Trust celebrates performance

The Royal London UK Special Situations Trust has enjoyed a first year of excellent relative performance since its launch on 20th July 2007.

Despite challenging market conditions, the fund has outperformed its UK All Companies peer group by 8.6% to achieve a top decile sector ranking.

Derek Mitchell was recruited specifically to launch and manage the new fund last year and has constructed a concentrated portfolio of around 30 "best idea" holdings, designed to target consistent top decile performance. Derek's high conviction approach places great emphasis on identifying the key macro drivers for the UK economy. From here, he is happy to take significant overweight or underweight sector positions relative to the fund's FTSE All Share Index when constructing the portfolio.

It is an approach that has served him well over the last 12 months, seeing him spend much of the year with a significant underweight in Financial and Consumer Cyclical stocks and an overweight position in the Industrial and Oil & Gas sectors. He looks for companies which are fundamentally undervalued by the market, which have a catalyst to unlock strong future earnings growth.

Stan Bland, Head of Sales, commented: "We are very pleased with the fund's outstanding performance since launch last July, particularly given that it was launched into the teeth of a savagely repricing market. The UK Special Situations Trust has been a strong addition to RLAM's high quality UK equity offering, and we have seen significant interest from clients in Derek's high conviction approach."

Derek Mitchell added: "It has been a testing but satisfying first year for me in charge of the fund and I am happy that I have been able to make the best of the challenging backdrop for the UK equity market. With a cautious view on the outlook for the UK consumer and question marks over the extent of the global economic slowdown, I am confident that the fund is well positioned to take advantage of a period of ongoing market volatility."

Launched at the same time as the UK Special Situations Trust, the Royal London UK Smaller Companies Trust has also posted promising results in its first 12 months. Managed by small cap specialist, Victoria Stewart, the fund returned -26.5% compared to a peer group average of -29.1%, ranking 38th in the UK Smaller Companies sector.