Sym turns over one-third of Cazenove European Income
Schroders fund manager James Sym has turned over one-third of his portfolio as he continues to play the European recovery picture.
Sym, who manages the £234m Cazenove European Income fund, is now favouring stocks further along the cyclical curve and is looking to focus on domestic-facing companies.
The manager likes to refresh his portfolio and has had a 72 per cent annualised turnover rate since inception and says: “Last year it was about buying low valuations and it did not really matter about earnings. This applied best to financials and consumer stocks and we benefited from that.
“I do not think the market has priced in the recovery and is still considering Europe to be depressed. We have sold out of some positions. We are trying to move out of early cycle stocks to where earnings are depressed. For example, we like construction companies and capital investment plays.”
Sym is favouring domestic- facing stocks and believes the commonly used tactic of favouring firms exposed to emerging market domestic growth may soon be reversed.
“It is a crowded trade paying for emerging market consumer exposure. I would not be surprised if market had not flipped on this in 18 months,” he says. “The reason is that European socks could trade at higher premium means cyclical growth will be huge.”
Sym is continuing to focus on peripheral Europe for the portfolio and is particularly attracted to Spain. He adds: “Things are improving in Spain and we could have economic growth for a couple of quarters next year in Spain. You could even see Spain powering European growth.”