Buxton fund suffers from market uncertainty

Buxton has suffered as a result of adopting a pro-cyclical stance, betting on an economic recovery, while defensive stocks have done well. However, he says he will not make any drastic changes to the portfolio as he still believes in the stocks he owns.

Indeed, Buxton says that high oil prices have created a gap between corporate fundamentals and share price performance: “I am still optimistic in terms of the securities I hold because I believe their fundamentals are still fine.”

But he warns that if oil prices remain high, many businesses could suffer as a result: “The market is not looking at fundamentals at present and this is why the fund has suffered.”

The Alpha Plus fund, launched in July 2002, is an unconstrained, concentrated portfolio of 20-40 stocks, with a focus on capital growth.

Although it has suffered in recent months, the fund is still ranked 20th out of 267 funds from launch to October 4, 2004. Over that period, it has provided a bid-to-bid return of 27.54%, compared with an average of 12.13% for the UK All Companies sector.