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Argonaut sells down overweight to energy

Barry Norris 480

Argonaut fund manager Barry Norris has reduced his exposure to energy companies in light of an expected slowdown in global economic growth.

The £207m Argonaut European Alpha fund was 5 per cent overweight in energy, which Norris has reduced to a neutral weighting over the last few weeks.

Norris (pictured) says: “We think the upside to energy costs is likely to be capped by weaker economic growth globallly and the development of shale gas.”

Norris sold a 1.5 per cent position in Norway-based Aker, which provides oilfield products, systems and services for customers in the oil and gas industry.

He says: “The stock had done well, making 45 per cent for us. But looking at the areas the company is in, I do not see how it could continue to surprise positively from there.”

Norris says there will still be some opportunities in the sector however.

He says: “We have sold companies that we think are not necessarily the highest-quality companies in the sector. The premium you are paying for the better quality companies in Europe at the moment is abnormally low, especially as the lower-quality companies are not going to grow profits and the higher-quality companies are.”

Equilibrium Asset Management investment manager Mike Deverell says: “Anything that is commodity-based is going to have a link to economic growth, which is going to weaken over the next year or so.”

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