SVM UK Opportunities Fund
Fresh thinking never goes out of style
The Fund, led by Neil Veitch, looks to achieve positive returns by identifying and investing in organisations with sound business models where he believes the current market valuation offers an opportunity. The Fund can invest in businesses of any size.

SVM UK Opportunities Fund
Fresh thinking never goes out of style

The Fund, led by Neil Veitch, looks to achieve positive returns by identifying and investing in organisations with sound business models where he believes the current market valuation offers an opportunity. The Fund can invest in businesses of any size.
Overview
Fund Objective
The objective of this Fund is to achieve capital growth over the long term (5 years or more) and it aims to outperform the MSCI United Kingdom IMI. The Fund will identify investment opportunities in UK companies whose future growth is not reflected in current market expectations. The Fund may invest in other permitted securities.
Approach
We believe the basis of successful investing is simple. We aim to find good businesses that we can buy at an attractive price.
But it’s important how we define and identify those characteristics in detail. We don’t see value and growth as two different measures or types of investment; and we don’t measure them on the basis of current earnings and share prices.
Rather than value or growth, we invest on the basis of the value of growth. We want to find strong companies for your portfolio whose future growth is not reflected in current market expectations. We believe these companies have an attractive positive bias in their risk-reward profile which makes them potentially rewarding investments in your portfolio.
Investing in this fund, you will be buying a concentrated portfolio of companies of any size with strong, undervalued long-term prospects. You can invest with confidence in our ability to find these companies, based on our long history of comprehensive UK company analysis and financial modelling, and our understanding of what’s changing in companies and their industries.
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Fund Details
Launch Date | 20 March 2000 |
Benchmark | MSCI United Kingdom IMI Index |
IA Sector | UK All Companies |
Type of Shares | Accumulation |
XD Date | 31 December |
Pay Date | 30 April |
Fund Size | £174.0m |
Data as at 31/03/2021.
Fund Managers

Neil joined SVM in 2006 to manage the SVM UK Opportunities Fund. He is also lead manager of the SVM World Equity Fund and co manager of the SVM All Europe SRI Fund.
Prior to joining SVM, Neil was responsible for UK mid & small cap investments at Dutch merchant bank, Kempen Capital Management, where he also managed pan European mandates.
Professional Qualifications:
CFA

Craig joined SVM in 2006 and is responsible for SVM's SRI and Corporate Governance analysis. Craig also assists the portfolio managers in equity research.
Professional Qualifications:
CFA
Portfolio
Risk Baskets
To help understand the overall balance of the portfolio, stocks are allocated to one of eight risk groups: defensive, cyclical, stable financial, unstable financial, consumer cyclical, oil & gas, mining and finally technology. Most of these groups are self explanatory but financials deserve some clarity. All financials are inherently unstable, but in the main, Lloyd’s underwriters and General Insurers take less balance sheet risk, so are relatively more stable than Banks or Life Assurers.
Seeing the portfolio broken down into these categories allows an understanding of how aggressive or defensive the overall portfolio is, and where risk is being taken.
Synthomer | 5.7 |
CRH | 4.3 |
Smurfit Kappa Group | 3.3 |
RWS Holdings | 3.3 |
Balfour Beatty | 2.6 |
Entain | 6.5 |
Norcros | 4.9 |
Ryanair | 3.1 |
Tesco | 2.7 |
Vistry Group | 2.1 |
Prudential | 4.5 |
Lloyds Banking Group | 3.4 |
Legal & General | 3.1 |
OSB Group | 1.8 |
Arden Partners | 0.1 |
Micron Technology | 5.1 |
Creo Medical Group | 2.7 |
Team17 | 1.7 |
Koninklijke Philips | 1.5 |
ActiveOps | 1.0 |
National Grid | 3.7 |
DCC | 2.5 |
Roche Holdings | 2.0 |
GlaxoSmithKline | 2.0 |
Jadestone Energy | 3.3 |
Energean | 1.9 |
Pantheon Resources | 1.7 |
Savannah Energy | 0.7 |
Jersey Oil & Gas | 0.5 |
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There are no holdings in this category
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Portfolio Structure
As an unconstrained fund we invest in our highest conviction ideas irrespective of market capitalisation or sector. As a consequence the SVM UK Opportunities Fund portfolio will vary considerably from the benchmark index and from other funds that are in the same IA sector.
Top 10 Holdings (%)
Source: SVM, as at 31/03/2021
Sector Exposure (%)
Source: SVM, as at 31/03/2021
Size Analysis (%)
Source: SVM, as at 31/03/2021
This Month's Featured Stock
National Grid
National Grid is an owner and operator of electricity & gas transmission and distribution networks in the UK and US. The company also has investments in LNG and interconnector operations.
During March, National Grid announced it was acquiring Western Power Distribution (WPD), the UK’s largest electricity distribution network, for an enterprise value of £14.2bn. At the same time, the company announced that it was disposing of its regulated Rhode Island business for £3.7bn and launched a sales process for a majority of its stake in its UK Gas Transmission business. The latter is expected to complete in 2022 and analysts estimate an enterprise value of c.£4bn for a disposal of 51%.
While the scale of the transactions were surprising, they make strategic sense for the business. Following completion, electricity will now account for 70% (from 60% previously) of National Grid’s total asset base. This pivots National Grid towards faster-growth markets that will benefit from the ongoing green-energy transition. In the UK, electricity demand has the potential to double by 2050 as electrified transport, building electricity consumption, and hydrogen production all grow. This should help underpin National Grid’s longer-term strategic ambition to grow group assets at an annual rate of 5-7%. Following these deals the group will remain geographically balanced, with US regulatory assets still accounting for c.40% of total assets.
National Grid currently trades on an estimated March 2022 PE of c.15x and a yield of 5.6%. Although never likely to be viewed as the most exciting of companies, we believe that the current valuation fails to reflect National Grid’s exposure to what are likely to be some of the most prevailing trends of the next few decades.
Performance
Performance (%)
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Prices
SVM funds are priced every working day at 12 noon UK time and prices are updated here shortly afterwards.
Source: State Street, as at 22/04/2021.
Literature
If you would like a copy of any historic factsheets please email info@svmonline.co.uk
- 2020
- 2019
- 2018
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- 2015
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Insights
Availability
The fund is a sub-fund within the SVM ICVC Fund, a UK domiciled Open Ended Investment Company, with UCITS status. The Funds are regulated by the UK Financial Conduct Authority.
Dealing into the fund is available daily. Deals are accepted on a forward pricing basis, with 24 hours notice. SVM employs SS&C Financial Services International Limited and SS&C Financial Services Europe Limited as third party administrator and transfer agent to our funds.
How to Invest
You can invest directly with us or through a wide variety of third party wraps, supermarkets and life companies.
For each fund in the SVM ICVC range we offer a B share class which is our lowest priced clean share class.
Share class availability via third parties varies depending on their model.
Dealing - Funds
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Professional Adviser Helpline
0800 0199 110
Literature Requests
0800 0199 440
Commentary
Equities made further progress over the month despite mixed Covid news. Tensions over vaccines remain and many parts of Europe are entering further lockdowns. Further wrangling over the safety profile of the Astra/Oxford vaccine risks undermining vaccination efforts in Europe and elsewhere. Infection rates also continue to rise in places such as India and Brazil where it had been thought there was a reasonable element of herd immunity. In spite of such concerns, investors continued to focus on the bigger picture: the vaccine roll-out is ongoing and recent economic data has highlighted the scope for a significant acceleration in economic activity. The fund gained +4.3% versus +4.0% for the MSCI UK Index.
Economic activity continued to rebound across the globe. Hiring is picking up aggressively and there is little evidence that either business or consumers have been significantly scarred by the pandemic. House prices in the US and elsewhere are rising at the fastest rate since the global financial crisis. President Biden’s stimulus was passed by US lawmakers and Europe is moving ahead with its recovery fund despite an attempted intervention by the German constitutional court. With monetary policy also extremely supportive, economic and profit forecasts for the next twelve to eighteen months look unduly conservative.
The fund’s consumer cyclical stocks performed well as investors looked forward to the reopening of the economy. Many of them were buoyed by strong updates. Bathroom and kitchen supplier, Norcros, even managed to release two positive trading updates in just one month. These resulted in the house broker raising forecasts for over 30% for the current year to the end of April and over 20% for the following year. Importantly, the impressive profit performance has been mirrored by the group’s cash generation and the business will be in a net cash position at year-end, providing significant scope for further acquisitions. Norcros has successfully acquired and integrated a number of smaller suppliers over the last couple of years and these acquisitions have generated material revenue synergies. As long-term shareholders, we look forward to the benefits of further acquisitions. Despite the management’s impressive track record the shares continue to languish at a material discount to both the sector and the market.
Vistry delivered full-year results that confirmed the strength of the ongoing recovery in the housebuilding division and strength in the partnerships business. In the twelve months since it acquired Linden Homes and the Partnerships & Regeneration business from Galliford Try, the group has made excellent progress in integrating the businesses and reducing debt. Management’s confidence in the outlook for the business was evidenced by significant share purchases by the CEO, Greg Fitzgerald.
Volution rose post impressive full-year results. Revenue grew at high-single digits in constant currency and adjusted profits grew in excess of 20%. Despite the sharp move in the share price over the last six months we believe there is further upside. Ventilation and air handling are of increasing importance in both new build and refurbished properties and look set to deliver robust growth for many years.
The fund’s energy holdings were generally weaker as the oil price retreated. Jadestone Energy fell as investors continued to digest the implications of the recent update. While some short-term disappointment is understandable, the resilience of the group’s financial and operating performance is underappreciated. Jersey Oil & Gas declined as the company raised additional equity.
New positions were initiated in 888 Holdings and ActiveOps. The fund added to its holding in Jadestone. DCC was top-sliced.
Equities made further progress over the month despite mixed Covid news. Tensions over vaccines remain and many parts of Europe are entering further lockdowns. Further wrangling over the safety profile of the Astra/Oxford vaccine risks undermining vaccination efforts in Europe and elsewhere. Infection rates also continue to rise in places such as India and Brazil where it had been thought there was a reasonable element of herd immunity. In spite of such concerns, investors continued to focus on the bigger picture: the vaccine roll-out is ongoing and recent economic data has highlighted the scope for a significant acceleration in economic activity. The fund gained +4.3% versus +4.0% for the MSCI UK Index.
Economic activity continued to rebound across the globe. Hiring is picking up aggressively and there is little evidence that either business or consumers have been significantly scarred by the pandemic. House prices in the US and elsewhere are rising at the fastest rate since the global financial crisis. President Biden’s stimulus was passed by US lawmakers and Europe is moving ahead with its recovery fund despite an attempted intervention by the German constitutional court. With monetary policy also extremely supportive, economic and profit forecasts for the next twelve to eighteen months look unduly conservative.
The fund’s consumer cyclical stocks performed well as investors looked forward to the reopening of the economy. Many of them were buoyed by strong updates. Bathroom and kitchen supplier, Norcros, even managed to release two positive trading updates in just one month. These resulted in the house broker raising forecasts for over 30% for the current year to the end of April and over 20% for the following year. Importantly, the impressive profit performance has been mirrored by the group’s cash generation and the business will be in a net cash position at year-end, providing significant scope for further acquisitions. Norcros has successfully acquired and integrated a number of smaller suppliers over the last couple of years and these acquisitions have generated material revenue synergies. As long-term shareholders, we look forward to the benefits of further acquisitions. Despite the management’s impressive track record the shares continue to languish at a material discount to both the sector and the market.
Vistry delivered full-year results that confirmed the strength of the ongoing recovery in the housebuilding division and strength in the partnerships business. In the twelve months since it acquired Linden Homes and the Partnerships & Regeneration business from Galliford Try, the group has made excellent progress in integrating the businesses and reducing debt. Management’s confidence in the outlook for the business was evidenced by significant share purchases by the CEO, Greg Fitzgerald.
Volution rose post impressive full-year results. Revenue grew at high-single digits in constant currency and adjusted profits grew in excess of 20%. Despite the sharp move in the share price over the last six months we believe there is further upside. Ventilation and air handling are of increasing importance in both new build and refurbished properties and look set to deliver robust growth for many years.
The fund’s energy holdings were generally weaker as the oil price retreated. Jadestone Energy fell as investors continued to digest the implications of the recent update. While some short-term disappointment is understandable, the resilience of the group’s financial and operating performance is underappreciated. Jersey Oil & Gas declined as the company raised additional equity.
New positions were initiated in 888 Holdings and ActiveOps. The fund added to its holding in Jadestone. DCC was top-sliced.
Independent thinking
Monthly analysis and insights from our fund managers