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BlackRock issues warning on UK consumer stocks

BlackRock UK absolute alpha fund co-manager Nick Osborne has sounded a warning over UK consumer stocks.

Speaking to Money Marketing at the Cofunds absolute returns round table last week, Osborne said he is finding short positions in stocks exposed to UK consumers, alongside those companies affected by the eurozone crisis. He said: “We are still cautious about UK consumption.

As a result, companies exposed to UK consumption are unlikely to see many profits. This effect is two-fold, there is a cyclical element in terms of consumption in the UK and it is also about development in terms of online offerings.”

Osborne said companies such as Amazon have challenged traditional retailers as the firm tends to offer a better and cheaper service.

Osborne said he has reduced the £1bn fund’s exposure to the market from over 20 per cent at the start of 2011 to less than 10 per cent now following poor performance last year when the fund fell by 6.85 per cent to December 30. The fund is running a more concentrated portfolio of 96 stocks this year compared with around 120 in the middle of last year.

Whitechurch Securities managing director Gavin Haynes says: “There is a risk when shorting a sector that is trading at such depressed valuations that there will be a sharp bounceback, which could hurt performance.”


Skandia launches adviser charging structure

Skandia has started taking applications for adviser charging through its platform. Skandia Investment Solutions will enable advisers to sign up customers to adviser charging which allows monetary or percentage charges via initial, regular, switch and adhoc fees. The charging structure comes under Skandia’s current capped limits of 4.5 per cent initial, 3 per cent switching […]


The Technical Quiz- May 31

To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions. QUESTION 1 Which of the following values is used in the calculation of a chargeable event gain on a single-premium life assurance policy that arises on the death of the life assured? A) The amount paid […]

MetLife adds bereavement service to group life product

MetLife has added a free bereavement and probate service to its group life protection product. Employees who are members of group life scheme and their families will be able to access legal and financial guidance, through a telephone helpline, including help with issues of probate, grants of representation and family disputes following bereavement. The service […]

BlackRock defends performance fees for UK absolute alpha

BlackRock has defended using performance fees on its £1bn UK absolute alpha fund. The fund, managed by Mark Lyttleton and Nick Osborne, has a performance fee of 20 per cent of any outperformance of the fund’s cash hurdle, which is set quarterly. To get this fee, the managers must also outperform a high water mark, […]


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