Merrill Lynch's shifting styles
Each month in IPE we analyse the portfolio style of a fund using the return-based portfolio analyser developed by London-based firm Style Research. This month we have chosen Merrill Lynch European Value A Fund, managed by Merrill Lynch Investment Managers.
The graph shows the changes in style the fund experienced during a 14-month period starting in January 2001 and is based on the fund’s monthly historical data for the past four years provided by Standard & Poor’s Micropal.
According to the analysis, the fund has been mainly focused on large value assets. At the beginning of the period analysed, 64% of the fund’s total assets were invested in large value European stocks, which fluctuated over the 14-month period, decreasing significantly by the end period to 48%. The highest proportion of assets invested in large value was, according to the graph, registered at the beginning of the first quarter of 2002, representing around 75% of the total investments of the fund.
Small value shares in European companies represented 22% at the end of January 2001, increasing to 40% by March of this year.
The shifting fund style over the period analysed was also reflected in cash, with 15% of the overall fund’s assets allocated to this at the beginning of the 14-month period, yet by the end of December 2001 there was none with the allocation being moved to small value investment.
The same month saw the fund starting to make an allocation to large growth stocks, which had increased to 12% by March 2002.
The fund has obtained a four-star rating by Standard & Poor’s.