Investment Trusts

Meet Phil Webster

Meet Phil Webster, Fund Manager of the BMO UK High Income Trust
June 2019

Philip Webster

Director, Portfolio Manager, European Equities

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Risk Disclaimer 

The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested. Past performance should not be seen as an indication of future performance.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

“There are three areas that I focus on as part of my role as Fund Manager; quality, discipline around valuations and remaining patient.

I’m clear in my approach to investment – clarity and quality is important when entrusted with the management of an investment company like the BMO UK High Income Trust. Fundamentally we’re stock pickers and we work to gain insights through detailed bottom-up analysis. Where the market appears to be overlooking the inherent quality and potential of a business, we seek to take advantage with meaningful positions capable of delivering performance over the long term.

The portfolio is concentrated at around 35 names – a number reflecting the amount of companies I feel we can realistically get close enough with to build and then constantly re-examine our conviction. Importantly, contact with the businesses we own doesn’t just mean screen-based analysis of financial metrics but face-to-face management meetings and site visits. It’s amazing how much more product and market information can be gleaned in person – these insights are critical given that larger relative weightings require greater comfort in the strength of an investment thesis. For example, we have made two trips to Ireland in the last year to see Cairn Homes, including visiting their Montrose development which cost €100m. This is an exceptional site, but one you can only understand fully when you see plans and location. The visit also gave us an opportunity to speak to the site manager, and contractors where we gained valuable insight into the concerns around build-cost inflation.

Risk Disclaimer 

The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested. Past performance should not be seen as an indication of future performance.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

Valuation is a key consideration. The price you pay for an investment is the critical determinant of its success, and alongside scope for meaningful upside, we recognise that an uncertain world can challenge even the most robust of business models from time to time. Having enough margin of safety in the valuation is key and we are diligent around assessing the underlying strength of the companies we invest in. In short, we need reassurance that the balance sheet, for example, can weather short-term upsets that may occur on the road to long-term success.

A glance at the portfolio’s top 10 relative positions illustrates our approach, with ‘value’ orientated names favoured over ‘expensive’ businesses that we believe mean investors are ‘overpaying’ for quality. Overinflated share prices always unravel in time and we believe a better use of that time is realising currently underappreciated value. Of course, that requires patience, but over time we’re convinced that it’s the right approach to deliver performance to our shareholders.”

If you would like to find out more from Phil, watch this video where he talks about his transition from playing hockey for GB to picking stocks for portfolios.

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