Money Matters

What The Munro Fund aims to offer

The Munro Fund is designed to give the asset class returns of the largest shares in the UK stock market. We think it can do this better than conventional passive trackers because of the unique way it is run. Our process gives it a number of features that differentiate it from other managed and tracker funds and this section spells those out in more detail.

Less work for you

Because The Munro Fund uses a tightly defined process it will not change over time. That means an investor will not have to monitor the fund for staff changes that might lead to a change in the investment style. Consequently it is a buy and forget fund ideal for those investing for the long term.

Low Risk

Because the fund invests in about 85% of the FTSE 350 it will capture the bulk of the movement of the market. That means it has a low risk of differing greatly from the performance of that index. Technically that gives it what is known as a low tracking error.

Improved returns

Although the fund closely follows the FTSE350 index its holding of each stock is likely to be different from the weight that stock holds in the index. For example company ABC Ltd might have a weight of 0.43% in the index but the holding in the fund might be 0.47%. That is not a big difference, but lots of small ones, repeated over most of the stocks will, we think, allow the fund to perform better than the index over a long period. That should give the fund a positive alpha.

Better risk adjusted returns

These small deviations over lots of stocks ought to give a good risk adjusted return. That can be measured by dividing the alpha over the tracking error to give the information ratio.

Better yield

The Munro Fund only invests in companies that pay a dividend or are forecast to pay one. Moreover, because the fund is overweight in companies paying out lots of dividends it should offer a better yield than the market.

High Transparency

The Munro Fund only invests in UK listed companies. It is classified by the Investment Managers Association as being in the UK All Companies sector although this category allows funds to invest up to 20% of their fund in stocks listed on overseas exchanges. Our investment process is explained in detailed and that provides investors with an idea of what sort of returns and risks the fund is likely to provide. Because The Munro Fund publishes it holdings in full every month on this website, and keeps an archive of these since launch, it is possible for investors to verify that the process is being followed. Our fee structure makes clear how much comes to us to run the fund and how much is kept, if any, by a third party intermediary as trail commission.

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