M&G fund manager Aled Smith has taken up a position in the Royal Bank of Scotland, despite the recent departure of chief executive Stephen Hester being taken negatively by investors.
Smith, who manages the £931.6m M&G Global Leaders fund, has also taken up a position in the Bank of Yokohama in preparation for a potential recovery in Japanese trade.
Despite RBS being named as a negative contributor in the fund’s review for June, Smith is encouraged by extensive restructuring at the bank, with much of this happening ahead of schedule.
He adds: “In addition, the bank has been able to decrease its losses on loans significantly. The sell-off in financials presented an opportunity to establish a position in RBS at an attractive price.”
RBS has also been viewed optimistically by M&G fund manager Mike Felton, who has increased his stake in the bank during June.
Felton, who manages the £662.9m M&G UK Growth fund, increased his exposure because of underlying fundamentals as well – despite the ‘setback’ of Hester’s departure.
Felton says: “The setback was used as an opportunity to pick up more RBS stock on the view that fundamentals will prevail and the UK bank is well placed to benefit from the recovery of the economy.”