Fund Manager’s Diary

Charles Deptford is investment manager of the Baring Equity Income Trust. His diary runs from December 2-8.

Saturday and Sunday The weekend starts as usual, with me taking my seven-year old son to play football. It is something he loves, but it is perhaps slightly less fun for the parents as we huddle on the touchline in the cold and rain.

Sunday is quieter, and I don my chef’s hat to prepare a spicy curry before settling down to relax with a few videos.

Monday The week starts with a bang. We have a new person joining the UK desk, and I spend the morning going through the essentials of what he needs to know. I feel pretty happy that we have made a good choice.

Probably the biggest development in the markets today is the takeover of RHM by Premier Foods. The shares are moving higher, but after discussing with the analyst I feel comfortable with our decision not to own them on fundamental grounds. In the evening I attend a Spanish class, then have a quick drink and a snack with an old friend.

Tuesday A profit warning from Woolworths and a disappointing trading statement from HSBC this morning. Thankfully, we do not hold the former and are underweight in the latter. We have made some strong returns from the retail sector this year, not so much from sector positioning but from successful stock selection.

At lunchtime I meet the management of Aberdeen Asset Management, another company that has performed exceptionally well for our investors over the past two years. Spotting companies that are out of favour but have the potential for recovery can be very rewarding for investors.

Wednesday As usual, company news and the performance of the US equity market overnight are the first two things I look at. This morning one of our largest holdings, Royal Bank of Scotland, has produced an upbeat trading statement. Results from another big holding of ours, First Choice, are also better than the market expected, and the funds are performing well.

In the afternoon I have a chance to think about strategy. Everyone now seems to be bearish on the dollar. That is usually a good time to think about taking the opposite stance, so I am looking at a number of companies with dollar earnings.

Thursday The day starts with the news that Gallaher, a major tobacco company, has had a takeover approach. Unfortunately we don’t hold it, and the shares are up more than 20%. I don’t think one should ever hold a company simply because it might get taken over, and to my mind that would have been the only reason to be holding Gallaher relative to its peer group in recent weeks.

The working day ends with a meeting with a potential new client. It appears to go well, but these things are always hard to read.

Friday After spending the night at my ex-wife’s house last night, since she was away, I get to take my two children to school. It is a real treat to do it, and it is odd having to think about things such as packed lunches and homework rather than company news. I get into the office and head straight into a two-hour teleconference with our colleagues in Tokyo, who are keen to sell one of the funds I manage.

After our Christmas lunch, I head back to the office to finish off a presentation for next week. It has been an exhausting and hectic week, and perhaps shows how varied the life of a fund manager can be. I think I will sleep well tonight.