M&G fund manager Tom Dobell says he is seeing opportunities in the consumer sector for his £7.9bn recovery fund.
The fund had 9.2 per cent in consumer services and 4.7 per cent in consumer goods at the end of March, according to data from FE.
Unilever is the sixth-biggest holding in the fund at 2.9 per cent. The fund also invests in Booker, Easyjet and Mothercare.
Speaking at an M&G investment briefing in London last week, Dobell said: “We have been light in the consumer area for a while. The new holdings we are looking at are in the consumer area.
“Prices have fallen in this sector and we are taking the opportunity to pick up shares.”
The recovery fund had a 5.9 per cent holding in BP at the end of March, which is trading at nearly £4. Dobell said BP is in the first stage of recovery and has strong potential over the medium term.
He said: “The cashflow capacity it has is awesome but the leadership has been underwhelming. This is a classic recovery stock and on a five-year view, BP will provide shareholders with returns that justify the sleepless nights it has given us.”
Dobell said he is still avoiding the banking sector, a common picking ground for recovery funds. He said: “We are cautious about financials. Banks are run for themselves rather than for shareholders.”
Whitechurch Securities managing director Gavin Haynes says there is logic behind Dobell’s belief that there are opportunities in the consumer sector.
He says: “Against such a gloomy backdrop, companies reliant on consumer spending have been indiscriminately sold off. Dobell has an excellent track record of picking up out of favour stocks.”