French exits oil & gas sector in M&G Global Basics

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Graham French has sold the M&G Global Basics fund’s remaining exposure to the oil and gas sector, as he looks at more attractive areas.

French dropped the £4.9bn fund’s last position in UK oil explorer Tullow Oil in May, leaving the portfolio with no presence in the sector, as well as exiting US-based engineering firm Fluor.

The fund’s FTSE Global Basics Composite Index, which includes all subsectors of the FTSE World Index except media, IT, telecommunications, financials and healthcare, has a 17.4 per cent weighting to oil and gas.

The fund has held Tullow for over a decade but Graham now feels that capital can be better allocated to more attractive areas outside of the oil and gas sector,” the fund’s May update explains.

At the start of 2013, M&G Global Basics had 5 per cent of its portfolio in oil and gas, but this was steadily reduced over the opening months of the year and stood at just 0.8 per cent during April.

The update adds: “Fluor was also a long-term holding, but Graham believes a fall in the number of large commodities-related capex projects in which the company specialises has affected its future prospects and he took the opportunity to sell the holding.”

French also added to manufacturing and industrials conglomerate United Technologies and logistics business United Parcel Service last month.

FE Analytics shows the fund is ranked fourth quartile in the IMA Global sector over one, three and five years to 27 June 2013.

M&G Global Basics’ top 10 holdings as at 31 May 2013

Rank Name %
1 SYMRISE AG 7.50
2 ANSELL 5.20
3 KIRIN HLDGS CO LTD 4.70
4 KERRY GROUP PLC 4.70
5 AMMB HLDGS BHD 4.50
6 G4S PLC 4.40
7 UNILEVER 4.40
8 PUBLICIS GROUPE SA 4.30
9 SCOTTS MIRACLE-GRO CO 4.20
10 AGRANA BETEILIGUNGS AG 3.90

Source: FE Analytics