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Artemis special sits cuts down on utilities

Derek Stuart, a co-manager of the £1.2 billion Artemis UK Special Situations fund, has reshuffled his holdings in the utilities sector by selling out of National Grid and International Power.

While Stuart had held International Power for some time, he bought into National Grid after the company issued new shares and forced the share price lower. He then sold the shares after the price bounced back.

Stuart says he and Ruth Keattch, his co-manager, are considering a similar trade involving Inmarsat, a global satellite network. Their fund does not hold Inmarsat, but a sale by a shareholder has depressed the firm’s share price.

However, Stuart emphasises he would never exploit technical factors in a company’s share price in this fashion if he did not consider it to be a fundamentally sound business.

“While we use technical analysis this only backs up the fundamentals. We would never buy a share that we did not like fundamentally.”

The fund held 6.7 per cent of its portfolio in utilities in September. The weighting is down four percentage points and its composition has changed, with Centrica constituting a 2.8 per cent holding.

Stuart says he has also allocated more to telecommunications stocks such as BT. Since September, the weighting in food, beverages, tobacco, oil and gas also went up, albeit to a lesser extent.

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