Church House Investment Management is offering a new share class on its Church House UK Equity Growth fund with an annual management fee of 0.6% for a limited time period as the vehicle reaches its 20th anniversary.
Primarily investing in UK large caps but with the ability to invest in global brands and smaller UK companies, the £65m fund is a 45 to 55 holdings portfolio managed by Church House chief executive James Mahon, Fred Mahon and Rory Campbell-Lamerton.
Originally launched in 2000 with 21 holdings, the fund has held six stocks throughout its entire history: Barclays, Close Brothers, Compass Group, Reed Elsevier, Prudential and Uniliver.
Church House's first strategy, UK Equity Growth was originally managed on behalf of private clients but has more recently joined the IA UK All Companies sector and begun working with the intermediary market.
The offer of a 0.6% share class represents a significant saving compared to the current AMC of 1.5%.
Church House UK Equity Growth is up 1.4% and 24.6% over three and five years respectively, while the IA UK All Companies sector is down 6.8% over three years and up 11% over five, according to FE fundinfo.
The fund has performed well in the market turmoil of 2020, falling 29.5% from the start of the year to the 23 March low, compared to the sector average fall of 36.2% and the FTSE 350's fall of 34.2% over the same period. It has also performed well since the market began to rally, rising 26.4% from 23 March, for a year-to-date loss of 10.8% compared to the sector average of 18.3%.
Speaking to Investment Week, Fred Mahon attributed 2020 performance to the quality bias in the fund's investment approach and an emphasis on balance sheet strength, noting the ability of top ten holdings such Unilever and Diageo to "access debt markets if they do need capital while already being relatively lowly levered".
He said: "We were pleasantly surprised that we managed to hold up on the upside because having been lower beta on the way down you always run the risk of being lower beta on the way up.
"But we were helped by the fact that we were active in putting cash back to work and sold out of some of the businesses that we think are going to struggle while picking up some good ones."
The management team have also used price falls to add new positions in the likes of Greggs and Trainline while topping up existing holdings in quality names.
Mahon noted the management team strength of Greggs, led by "brilliant innovator" Roger Whiteside, and said that while the coronavirus pandemic has had an impact on business, the company's share price fall offers a good opportunity for the fund over the longer term.
Meanwhile, he said Trainline offers "massive and exciting growth opportunities" via the group's international expansion plans and the shift away from physical ticket machines, which has also been hastened by the pandemic.
Conversely, the fund has sold out of holdings that have been hit by events in 2020, including HSBC and aerospace and auto supplier Meggitt.
Mahon said due to the events in Hong Kong, and consequently the relationship between the UK and China, the investment with HSBC had become untenable.
He explained: "HSBC has become so embroiled in the in the UK-Hong Kong-China politics, it has got to be an absolute nightmare for a chief exec to actually be able to run a business, and in this particular moment being agile is so key.
"When you are tiptoeing between some of the world's biggest powers rather than worrying about keeping your business going, we think we think that that's a real hindrance."