BlackRock US Dynamic fund’s recently-appointed managers Chris Leavy and Peter Stoumaras have increased the fund’s exposure to information technology.
Although stocks within the sector – such as Google and Western Union – were the biggest drag on performance last month, the managers still favour the companies in the IT sector which have strong free cash flow, the ability to sustain and perhaps grow their margins and the potential to grow their business.
Apple (5.2 per cent), Google (3.5 per cent) and Microsoft (2.5 per cent) are all top 10 holdings in the £97m fund.
“We significantly increased our weighting in information technology and also added to financials and industrials,” the managers report. “We funded these increases by lowering our weightings in the healthcare and consumer discretionary sectors.
“Notwithstanding the recent weakness, we believe equities continue to offer decent value, especially relative to bonds. Company margins remain high in an environment marked by slow economic growth.”
Information technology, which was increased by 2.3 per cent, is the portfolio’s largest sector weighting at 20.8 per cent, and one of the fund’s largest sector overweights, along with healthcare and energy.