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Cazenove decreases China exposure

The £175.3m Cazenove Multi-Manager Global ex UK fund has repositioned its European exposure to focus on domestic value and move away from the Chinese growth story.

Fund managers Marcus Brookes and Robin McDonald have sold their holding in the £812.8m Neptune European Opportunities fund, which accounted for 5.48 per cent of the portfolio in May, and have taken a 3.95 per cent position in the £180.3m Artemis European Growth fund.

The Artemis European Growth fund, which is managed by Philip Wolstencroft and Peter Saacke, is focused on value stocks and includes names such as Italian telecommunications company Telecom Italia and Swedish bank Svenska Handelsbanken – which have strong domestic businesses – within its top 10 holdings.

Rob Burnett’s Neptune European Opportunities fund, on the other hand, has a “cautionary stance” on firms with a high exposure to domestic Europe, such as those in the banking, utilities, telecommunications and food retail sectors and instead concentrates on companies deriving much of their earnings from outside of the region.

In the Cazenove Multi-Manager Global ex UK fund’s quarterly update, Brookes and McDonald say the rotation in their European holdings has had an emphasis on selected domestic cyclical areas such as financial, retail and media.

It says: “We continue to believe that the expected slowdown in Chinese growth will have a larger impact than many are currently expecting and that this is not yet reflected in valuations.

“As such, we feel comfortable investing in areas less exposed to this story, where valuations appear to have already priced in the difficult economic environment ahead.”

After the move, the fund’s European exposure, which accounts for 13.89 per cent of the portfolio, is gained through the Artemis European Growth, the £721.6m Cazenove European fund and the iShares MSCI Europe ex-UK exchange traded fund.

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