Managers weightings shift into FTSE 100

The Fidelity and Artemis Special Situations funds, managed by Anthony Bolton and Derek Stuart respectively, have their highest ever weightings in the FTSE 100, while Mark Hall, manager of the Rensburg UK Select Growth fund, has increased his weighting in large-caps from 32% to 42% over the past eight weeks.

Bolton has raised his exposure to large-caps to 36% over the past nine months. He says that the underperformance of the FTSE 100 has led to the opportunity to find some value among the large-caps.

“I go where I find stocks that offer value,” he says. “After the stockmarket returns of the past two years, it is sensible to be a bit more cautious. But I do not think we will have reached the top of the cycle until private investors start coming back into the stockmarket in strong numbers. This has not happened yet.”

Stuart has increased his exposure to the FTSE 100 index to 40% of his Artemis Special Situations fund. This is more a reflection of valuations than future growth prospects: “I expect large, mid and small-caps to perform generally in line with each other in the immediate future. There are investment opportunities in all three areas, but there are not the screaming buys of two years ago. Then you could buy stocks on 7-8x earnings. Now these stocks are on 12-13x earnings.”

Hall says his increased weighting in large-caps reflects the fact that an increasing proportion of mid-caps have reached his target price of fair value.

He adds that stocks moved quickly through his price targets because of bid speculation among mid-caps: “A good example is BBA, whose share price spiked up 12-13% in just one day. The £1.1bn takeover for RAC by Aviva is 10-15% above what we regard as the fair value. We sold RAC when it reached our estimate of fair value.”