M&G fund manager Kelly is doubling down on former highflyers such as Novo Nordisk, betting these fallen stars will outperform peers. The strategy focuses on quality companies that have seen sharp share-price declines despite resilient fundamentals. Kelly argues that market overreactions create attractive entry points for long-term investors willing to tolerate near-term volatility.

The portfolio emphasizes healthcare and technology names with durable competitive advantages. Novo Nordisk, the Danish obesity-drug maker, exemplifies the thesis: its shares retreated from 2023 highs but retain structural growth drivers. Kelly's team screens for strong balance sheets, pricing power, and reinvestment runways that the market may be underpricing.

Risk management centers on position sizing and diversification across sectors. The approach avoids deep-value traps by requiring clear catalysts for re-rating. Kelly notes that patience is essential, as turnaround timelines often extend beyond consensus expectations.

Early results show the strategy narrowing the gap with benchmark indices after a difficult 2023. Investors should monitor earnings revisions and pipeline progress at core holdings for confirmation of the thesis.