F&C overhauls portfolio to improve performance
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Catherine Stanley has overhauled the £522m F&C Stewardship Growth fund since she took it over from Ted Scott in June 2009, aiming to improve performance.
Over the three years to March 31 Stewardship Growth fell 25.8% against the UK All Companies sector’s 6.5% average fall. Over one year it returned 44.5% against the peer group’s 52.2%, according to Financial Express.
The fund’s ethical criteria prevent it from investing in resources and industrials, which has caused it to struggle as miners have rallied. (article continues below)
“The fund has had a tough time in the last two years, all for ethical reasons,” Stanley says. “We can’t own industrials as they often work for defence, or mining and oil companies. Most cyclical stuff we can’t have.” An overweight to utilities in place of these sectors was also a drag on performance, she adds.
Stanley has recently been rotating into mid-cap healthcare stocks and technology, and altering weightings in the banking sector.
She has also cut weightings in micro-caps to improve liquidity in the fund. “A lot of stocks are still in there but we have changed a reasonable amount at the small-cap end, and weightings in the large-cap names.
“The difference is in how we construct the portfolio–I like a tight stock list, and nothing in there less than 50 basis points. There were a lot of small-cap names, and, given that the fund is quite big, it was hard to get them to 50 basis points,” she says.
Stanley has also trimmed the number of holdings down from 87 and is aiming to keep it between 70 and 75.
