Woolnough buys bank shares for M&G Optimal Income


M&G’s Richard Woolnough has added shares in several banks to his strategic bond fund as the £15.6bn portfolio’s exposure to equities continues to rise.

M&G Optimal Income’s equity position moved from 11.1 per cent at the end of April to 12.2 per cent at the end of May after Woolnough bought banking and technology shares.

Last month, the manager added “a number of banking names” to the portfolio, including Barclays and BNP Paribas. Woolnough has also been reducing exposure to financial names where he has been buying the equity instead, including JP Morgan and Bank of America.

Furthermore, the manager bought shares in technology provider Cisco Systems and electronics and engineering firm Siemens.

The fund’s May update adds: “While Richard has been steadily adding to his equity holdings in recent months, he has been selling down positions that have performed particularly strongly as well – this month, reducing his holding in Johnson & Johnson and selling out of Roche.”

As well as adding to his equity position, Woolnough increased his weighting in long-dated US dollar bonds, as he considers them to be more attractive than similarly dated euro or sterling-denominated issues.

The manager bought bonds issued by Philip Morris parent company Altria Group and added to holdings in Verizon, Time Warner and AT&T. He also bought a number of new high yield issues in May, while the fund’s duration fell from 3 years to 2.5 years.

In April, Woolnough started a new position in Apple after the technology giant’s share price fell below $400 – a level which the bond manager considered “attractive”.