The income guru says banks and life assurance companies will be the main beneficiaries of the downturn, which will see a number of investments available at “stunningly attractive prices.”
Mott says that banks now represent some 22 per cent of his portfolio as any sub-prime contagion available on their balance sheet would have shown up by this stage.
He says: “If any of these banks are likely to have these problems, these are the very market conditions to reveal such news. We believe that we are close to the “bottom” of sentiment in the banking sector and the financials generally.”
Mott also says the group has added a number of high growth portfolios as he sees the de-rating of stocks amid fears of high ratings as something that has been overdone at the moment.
He has also adopted a rigid pricing structure amongst housing-stocks while also looking at increasing his exposure to the minor sector, all of which has meant Mott has had to dilute his interest in emerging market consumption, which despite being good value is being shrouded by stunning value elsewhere.
He says: “We believe that we are working through a financial convulsion which should not lead to a major economic dislocation. The PSigma income fund has increased its “bar-bell” focus but nevertheless our weightings in the “mega-cap” area remain relatively unchanged. The top 25 “mega-cap” stocks in the UK market make up 60 per cent of the FTSE 350 index. The PSigma income fund is 66 per cent weighted in this area.”