Vanburgh switching to value theme for investment trusts

1 December 2011 | By Amanda Smith

Hawksmoor Investment Management is positioning its Vanbrugh fund to benefit from an improvement in the economic environment and to withstand further turmoil.

It has been disappointed with Vanbrugh’s recent performance but plans to ride out the short-term difficulties by focusing on undervalued assets. In October, the firm reviewed all Vanbrugh’s holdings. Artemis special situations was sold in favour of Invesco Perpetual’s UK income strategic fund and Legal & General’s dynamic bond fund was sold because Hawksmoor felt it overlapped with other holdings.

BH global, an investment trust, was sold because it does not produce a yield and Hawksmoor felt it was looking expensive relative to other investment trusts.
At launch, Vanbrugh held around 50 per cent in investment trusts, which has been reduced over time as markets have risen. Vanbrugh held 20 per cent in investment trusts a couple of months ago, which had a negative effect on performance but it is now building up its investment trust exposure.

The firm says the lack of interest in the investment trust market has meant anybody who wants to sell has to accept a low price, even if the underlying net asset value of the trust is rising. It aims to pick up shares in investment trusts it already owns or those it has been watching for a long time, in circumstances where the underlying assets are rising but share prices are falling, or at best, staying the same.

Fund manager Daniel Lockyer says: “We want a measured approach to take advantage of these opportunities because if markets turn round, these opportunities will not be

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