Fund managers diary

Chris Hiorns is the manager of the Amity European fund and co-manager of the Amity Sterling Bond fund at Ecclesiastical Investment Management. His diary runs from January 17-21.



Monday Trading updates from British retailers following the key Christmas trading continue to come in thick and fast. The weaker retailers blame snow and ice for falling sales while the stronger ones continue to generate higher sales and profits.

Still, I decide to take a contrarian stance and pick up one of the weaker performers, Dixons Retail, as the company trades at under a tenth of sales and there is every prospect that restructuring should see a recovery in margins.

Tuesday The start of the year is always accompanied by a string of economic and equity strategy meetings and 2011 has been no exception. Yet again, the consensus estimates of the likely gains in the equity market seem to be averaging out at 10% above the start of the year level.

Still the grim outlook for the British domestic economy continues with analysts projecting real incomes in Britain falling for years to come. I have always been a bit of a pessimist on the British economy but cannot help feeling things are not quite as bad as that.

The latest Retail Prices Index announcement predictably came in ahead of estimates as inflation remains firmly above target.

Wednesday Have a meeting with some analysts for a catch-up on the British industrial sector. The sector has performed tremendously well over the past year or more but with rising commodity prices I am beginning to wonder when the cycle will turn. Make it to gym for the first time this week. (Diary continues below)

Thursday Have to attend a presentation training session in the morning. Exercises in posture, delivery and handshakes made a welcome diversion from the office, though I may have irritated the trainer by checking my iPad for the latest market prices a bit too often.

Arrive home to discover, with amusement, the news that Labour have lost their former postman in the role of shadow chancellor and have replaced him with no less than Ed “Baby Brown” Balls.

Friday The European banking shares have been the strongest performers over the week and it appears that the equity markets have convinced themselves that the sovereign debt problems of the eurozone are receding. The bond markets appear less convinced and yields on the periphery country debt remain close to peak levels.

So far, the bond investors have tended to read the situation better than equity analysts and I remain unconvinced that European leaders will find any long-term solution to the problem. I also doubt any new bail-out mechanism will reassure the market for more than a few weeks. Decide to avoid the European banking sector after the recent strong recovery valuations.

Head off to a sandwich lunch at a local wine bar with a fixed interest broker to find out more about what is going on in the bond markets.

Weekend Have an early start today as I set out on the third in a series of cross country runs in the Surrey countryside. The challenge promises 12km of energy sapping and muddy track across rocky and dirty terrain. Surely the perfect way to de-stress after a busy week in the capital markets – I only wish I had managed to spend more time in the gym.