He says we are starting to see a polarisation of quality corporate earnings and that as the global economic slowdown takes hold, it will become essential to identify structural growth drivers and invest in companies that can take advantage of them.
De Fonclare, who celebrates his three-year anniversary on the fund this month, says he spent most of 2007 repositioning by taking profits from the mid-cap area in particular. Profits were invested in firms that he felt could weather the market downturn by offering above-average growth, low volatility and a strong balance sheet.
He says: “Share prices have already discounted some of the poor economic and corporate news emerging. We are alert to opportunities which current market weakness might provide while remaining selective.
“We believe 2008 will prove to be a stockpicker’s year. Our focus will be on companies with winning business models, which are well capitalised and have the opportunity to outgrow their market by investing contra-cyclically either organically or by acquisition.These companies should be able to emerge from the downturn in a stronger position than they were in originally.”