View more on these topics

Message overhauls Old Mutual fund

Stephen Message has turned over 45 per cent of the Old mutual extra income fund since he took over the management in December.

Message increased conviction in individual holdings and reduced the total number from the targeted 75 to 50.

Examples of sales include stakes in Debenhams and HMV, and Vedanta Resources, a diversified mining company. Vedanta Resources was one of Message’s highest-conviction holdings, but he prefers industrial engineering and oil services companies.

In contrast, Debenhams was not a high-conviction holding. Message says there are other British retailers, such as Next, that make a more compelling investment case.

Overall, his recent changes translated into 65 per cent exposure to large caps and 35 per cent exposure to mid caps. Before he took over, the weightings were 60 per cent large cap, 30 per cent mid cap and 10 per cent small cap.

He created key overweight positions in support services and consumer cyclical areas such as media, travel and leisure. The fund’s key underweights are tobacco, real estate and utilities. Message says the real estate sector is too leveraged, while tobacco and utilities do not offer much scope for dividend growth.

Message increased the fund’s exposure to pharmaceuticals and decreased its weighting in the mining sector. However, the portfolio maintains a cyclical bias and is invested in stocks that he expects to benefit from an economic recovery.

Message says he will continue to manage the fund with a strategy where he allocates more to high-conviction holdings.

Recommended

26

DWP to ban DB-DC transfers

The Government is to stop the majority of people from transferring out of final-salary pensions into defined-contribution schemes from April 2012. The Department for Work and Pensions revealed its plans to put an end to transfers in a consultation setting out the draft legislation for the abolition of contracting out. Some pre-1997 benefits, called excess […]

A time for bonds

Invesco’s corporate bond fund could be an investment for a difficult economy

Five reasons for optimism in India

By Kunal Desai, Head of Indian Equities at Neptune Investment Management Following the MSCI India Index’s 26.4 per cent return in 2014, stemming from a 7.3 per cent rise in GDP, investors have recently become increasingly concerned about India’s future growth potential. What has happened to India’s reform agenda and are there any signs of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment