Fund Strategy
17 November 2003

  • [Focus] Britannic focuses on UK recovery

    17 Nov 2003

    In a climate where most major markets have shown growth in recent times, the performance of Britannic Asset Management's range of funds could be classed as disappointing, with eight out of 12 funds over three years and 10 out of 15 funds over one year underperforming their sector average. Corporate concerns about parent company Britannic Group have added to the firm's worries, but some bright spots shine out amid the gloom."What attracted us to Britannic is the way it runs its teams," ...

  • A spell in the sun that's set to run

    17 Nov 2003

    It's odd getting used to fund performance figures in positive territory. Over the last few years, the best funds were those that fell less rapidly than the others. But now, golly gosh, we're beginning to see figures that might look good in advertisements.Take the case of DWS UK Opportunities. DWS has to be congratulated for launching this fund a year ago amid the relentless downward movement of the bear market. "We launched it in the face of complete and utter gloom," admits manager ...

  • Do you need Brics to build a portfolio?

    17 Nov 2003

    History is full of empires that have risen and fallen. The Romans, the British, the Soviets and many others have all had their day before suffering a decline in power. It would be short-sighted therefore to assume that the current economic and political domination by the Western economies, led by the US, will continue unchallenged ad infinitum.This is not to say the West is going into serious decline; only that several countries, having reformed their economies, are catching up. ...

  • Dynamic fund puts high value on low valuations

    17 Nov 2003

    ROSS HOLLYMAN, 34, manages the new GAM Star UK Dynamic fund, which was launched this week. He joined the firm earlier this year after working at JP Morgan Fleming Asset Management, where he managed UK portfolios. He became a fund manager in 1997 after joining the Robert Fleming Group in 1991. Hollyman holds a BSc in Actuarial Sciences from City University.Q: You say many of your stock ideas are likely to be at the small and mid-cap end of the market - why?A: This end of the ...

  • e.tr@der

    17 Nov 2003

    From: sarah.h-d@giles&carson.co.ukTo: e-trader@stella-am.comSubject: Are you free on Wednesday?I know it's short notice, but one of our guests at the WIG Awards dinner has dropped out and it would please me greatly if you could come as my guest. It would give me a chance to make up for that unfortunate phone call.From: e-trader@stella-am.comTo: liz.trader@activeinsure.co.ukSubject: Wednesday nightI'll have to stay in London on Wednesday. I'm representing ...

  • Euro tech trust takes advantage of rebound

    17 Nov 2003

    The Close Finsbury EuroTech investment trust reported strong performance for the year to August 31, buoyed by a rebound in the technology sector and increased exposure to early-stage technology companies that had been "exceptionally undervalued".The trust increased net asset value by 43.7% over the year compared with a rise in the FTSE eTX All-Share index of 19.5% and a rise in the FTSE Innovation index of 8.2% over the same period. The long-term performance benchmark - the MSCI ...

  • Frost cools towards high-quality credits

    17 Nov 2003

    Adrian Frost is limiting his exposure to steel and airline credits in the Artemis High Yield Bond fund, preferring to focus on more stable industries such as food, utilities, consumer products and telecoms.However, Frost (pictured) admits that some of the old economy bonds now look more vulnerable than the new economy debt. He says: "There are always companies and industries getting into trouble. There is always one sector where people are doing stupid things. You have to look at ...

  • Fund manager's diary

    17 Nov 2003

    Wednesday An early start with the tortuous 100-mile journey by car from Aberdeen to Inverness to attend the board meeting of HIE Ventures, our private equity fund for the Highlands and Islands of Scotland. Fortunately, the fund is doing well and the board is relatively happy with our performance, but the difficulty we face is that although this region is vast, it is extremely sparsely populated and it is a challenge to find a reasonable number of good-quality investment opportunities.The ...

  • Gilts a 'natural choice' for low-risk investors

    17 Nov 2003

    Close Finsbury Asset Management is to launch an actively managed gilt portfolio, which will be managed by Charteris Treasury Portfolio Managers.The Close Finsbury UK Gilt fund will be open to both institutional and retail investors, and is a subfund of Close Finsbury Global Investment Funds, an Ireland-domiciled, open-ended investment company. It will invest in top-grade UK government bonds, AAA-rated or equivalent.Charteris Treasury Portfolio Managers is a fixed interest investment ...

  • Global Asset Management

    17 Nov 2003

    GAM Star UK Dynamic FundType: UcitsAim: Growth by investing in UK stocksMinimum investment: Lump sum £3,000Investment focus: 100% UK equitiesCharges: Initial up to 5%, annual 1.5%Commission: Initial 3%Tel: 020 7393 8724

  • Japan enters period of 'forgiveness'

    17 Nov 2003

    Alex Griffiths, manager of the newly launched Odey Japan fund, believes that Japan is entering a period of "forgiveness", which means that the latest rally in Japanese equities is sustainable.Griffiths says that there will be a substantial redistribution of wealth over the next few years from the private sector to the corporate and banking sectors. He says: "This rally is different from past ones. When Resona restructured, shareholders didn't lose everything. It was ¥30-40 ...

  • JO Hambro hunts managers for two new fund launches

    17 Nov 2003

    JO Hambro Capital Management is planning to launch UK Income and Japan funds next year, and has been looking at a number of managers to run them.Managing director Andreas Lehmann says the group believes the Japanese market could stage a comeback and ultimately may be as significant as it was 10-15 years ago. JO Hambro has been looking at potential managers for the new Japan fund, and most of these managers have a small or mid-cap bias. Lehmann adds: "This is where the real interest ...

  • Latest market trend is set to linger

    17 Nov 2003

    From relatively humble beginnings, the fund of funds investment solution has matured into the latest investment trend and must-have product in the marketplace - with Fidelity, the largest money manager in the UK, the most recent high-profile entrant. Other key participants this year have included Gartmore, Skandia, M&G, Insight (with its acquistion of Rothschilds) and New Star, with its purchase of Edinburgh via Aberdeen. Jupiter and Credit Suisse were relatively early entrants, ...

  • Long-term growth from small-caps

    17 Nov 2003

    Carl Stick, manager of the Rathbone UK Special Situations fund, says that while larger-cap stocks may do some catching up in the short term, there are growth issues with the major FTSE 100 sectors of banks, pharmaceuticals, telecoms and oils.Stick (pictured) believes that longer-term growth will continue to come from the small and mid-cap areas of the market, although selective exposure to larger-capitalisation stocks has helped fund performance over the past year. He is optimistic ...

  • Lum sells out and takes Chinese profits

    17 Nov 2003

    Solus Eastern Enterprises fund manager Jeffrey Lum has been taking profits in Chinese stocks because he believes the market has priced in such high expectations that they are now fully valued."Although China's economy will continue to have strong growth, a lot of these expectations have been discounted. We would rather sell out now and take profits," says Lum, who co-manages the £39.2m fund with Christopher Wong.Lum is not overly concerned about the outlook for the Chinese ...

  • Man Investments

    17 Nov 2003

    Man Multi-Strategy Series 6Type: Multi-manager hedge fund portfolioAim: Income or growth by investing in hedge fundsMinimum investment: Lump sum $50,000, E50,000Place of registration: BermudaInvestment focus: 100% in hedge fundsGuarantee: 120% of capital returned regardless of performance of underlying investments at maturity Charges: Annual 3%, performance fee 20%Commission: Subject to negotiationTel: 020 7285 2000

  • Matrix Money Management

    17 Nov 2003

    Sitka Health Fund VCTType: Venture Capital TrustAim: Growth by investing in unquoted companies in the healthcare sector Minimum investment: Lump sum £2,500Opening/closing date: October 21, 2003/April 2, 2004 for 2003/2004 tax year, June 30 2004 for 2004/2005 tax year Charges: Initial 5.5%, annual 2.25%Commission: Initial 2.25%, renewal 0.375%Tel: 020 7292 0825

  • Merrill duo tip 2004 as golden era for metals

    17 Nov 2003

    Merrill Lynch Investment Managers natural resources team head Graham Birch believes next year will be a much better year for base metal prices, arguing that mining companies will not be quick to increase production.Birch says: "In the last couple of years we have seen a market rally, but nowhere near the sort of levels seen in the early 1990s, since inventories are still quite high."He says mining bosses are learning from their experiences over the past decade. During that period ...

  • My Asset Allocation

    17 Nov 2003

    After 17 consecutive calendar years of beating the Europe ex UK sector average, having one of the highest profiles in the fund management industry and having raised billions of dollars at BlackRock and Investec, 2003 in performance terms has been Albert Morillo's annus horribilis.Over the past 12 months - much of which has been characterised by a significant rally in European equities - the Investec European portfolio has been handicapped in a number of key areas. First, we have ...

  • My Asset Allocation

    17 Nov 2003

    I have been asked to review my portfolio selection of last year (Fund Strategy, October 28, 2002) to see how it has performed and if I would change it in today's market conditions. I believe my strategic overview was correct; the emphasis on the UK, and in particular on mid-caps, has proved a good call, while the bond exposure has not been too great a drag on performance.Andy Brough's Schroder UK Mid 250 fund is widely admired and I am very happy with the year's return of 33.4%. ...

  • Odey Asset Management

    17 Nov 2003

    Odey Japan FundType: OeicAim: Growth by investing in Japanese equitiesMinimum investment: Lump sum £5,000Investment split: 100% in Japanese equitiesIsa link/Pep transfers: YesCharges: Initial 4%, annual 1.5%Commission: Initial 3%Tel: 020 7208 1400Treasury Hedge FundType: Hedge fundAim: Growth by investing in global currencies, including gold, interest rates and related instruments Minimum investment: £100,000, $100,000Place ...

  • Quality is cheap in Europe, says MFS

    17 Nov 2003

    Olivier Lebleu, associate portfolio manager on the MFS Continental European Equity fund, says he has never seen such a discount for quality names as currently exists in Europe, and banks and pharmaceuticals are the two dominant themes in the portfolio.Lebleu says the lower-quality stocks that have led the first stage of the rally are unlikely to continue to outperform. He adds: "There is reason to be cautious. They need the cycle to be strong just to support the valuation, let alone ...

  • Recovery and value dominate UK Dynamic fund

    17 Nov 2003

    Gambhir says that as the stockmarket has declined, investors have become more realistic about their expectations of equities at the same time as corporate management has become more focused on meeting expectations. More companies are therefore beating expectations and more recovery situations are emerging.The fund, which has been awarded an S&P AA rating, has positions in JJB and Pilkington as part of this recovery theme. Gambhir says: "Pilkington had a high debt burden, but ...

  • Schroder Property Investment

    17 Nov 2003

    Schroder Indirect Real Estate FundType: Property fund of fundsAim: Income and growth by investing in a portfolio of property funds and property shares Minimum investment: Lump sum £25,000Investment split: Retail warehouse 24%, industrial 18%, shops 16%, central London offices 16%, offices excluding London 16%, shopping centres 4%, other 6% Charges: Annual 0.8%Commission: NegotiableTel: 020 7658 6787Schroder Property Investment Management has established ...

  • Skandia Investment Management

    17 Nov 2003

    Equity Income FundType: Oeic fund of fundsAim: Income and growth by investing in equity income fundsMinimum investment: Lump sum £1,000, Isa/Pep transfers £10,000, monthly £50 Investment split: Lazard UK equity income mandate 18%, Liontrust First Income fund 18%, Merrill Lynch IM UK securities mandate 18%, Newton Higher Income fund 18%, SGAM UK equities mandate 18%, Martin Currie UK assets mandate 10% Isa link/Pep transfers: YesCharges: Initial 5%, ...

  • Swip looks to Sweden for office property gains

    17 Nov 2003

    Scottish Widows Investment Partnership head of property research Ian Hally says the Stockholm office market is looking attractive at the moment, and argues that other investors are yet to realise this.Hally has been researching the European property market after some of the firm's clients asked to increase exposure to real estate outside the UK. Swip may also consider launching a European property investment trust on the back of this research.Hally, who has identified Sweden ...

  • The perfect pass over?

    17 Nov 2003

    A new report has posed some serious questions about the ability of the industrialised nations to maintain their economic superiority over the next few decades. The one-time world leaders will slowly slip down the ranks as the emerging economies of Brazil, Russia, India and China take their place, predicts the survey.The group of emerging economies - dubbed the Brics (from their initials) by report author Goldman Sachs - are set to benefit from higher growth rates. And, if the predictions ...

  • UK relies on the rule of principle to avoid US scandals

    17 Nov 2003

    Two potential scandals arose last week that once again threatened to rock investors' fragile confidence in the fund management industry. New York attorney general Eliot Spitzer hit out at "market timing", where hedge fund managers collude with mutual fund managers to take advantage of pricing opportunities at the expense of the longer-term investor.Separately, the Financial Reporting Review Panel - as part of its new, proactive approach to uncovering accounting irregularities - ...

  • Valuation gap emerges as recovery takes hold

    17 Nov 2003

    Robert Davy, manager of the Schroder ISF Emerging Markets fund, says that emerging market valuations remain below the level typical at this stage of an economic recovery.Davy believes that the valuations do not reflect improvements in corporate fundamentals and the large falls in benchmark interest rates in key markets. He believes that the macro environment for emerging markets is improving and should continue to benefit from the increasing strength of the US. He adds that analysts' ...

  • What the advisers say

    17 Nov 2003

    Nick Dewhirst, CEO of www.investors-routemap.co.uk, recommends funds invested in India and Brazil, but not Russia or China.He has picked vehicles that specialise in a particular country: "You have much more control over a portfolio if you have a selection of holdings in specialised funds. This way I can pick and choose the Brics I like and avoid the others."Dewhirst argues that open-ended funds are too broadly invested for this purpose, but says investment trusts are suitable. ...

  • Why the Brics' economies will grow

    17 Nov 2003

    To make their projections, the authors of the Goldman Sachs report use an economic model that takes into account the main reasons why economies grow. Broadly speaking, this can occur in three ways: the number of workers increases, more factories turn out more goods or the workforce - through improvements in technology - turn out more goods in the same amount of time.But a fourth dynamic is at work. Economic size - as measured in terms of gross domestic product - is expressed in ...

  • World roundup

    17 Nov 2003

    An absence of market-moving reports in the US meant that the rest of the world lacked direction last week, which led to investors taking the opportunity to cash in profits. Still, selling was curtailed by news that the French and German economies both returned to growth in the third quarter and that Japanese Q3 expansion topped expectations.TMTNasdaq: 1967 from 1971Investors cashed in profits on recent technology gains at the start of the week, awaiting further evidence ...

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