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Whiteoak picks the fast route for stocks

‘I can make a decision to buy or sell as soon as I come out of a meeting’

Axa Framlington small companies fund manager Roger Whiteoak says his lack of dependence on quantitive and analyst data speeds up his stockpicking and can leave other managers trailing.

Speaking to Money Marketing, Whiteoak says: “Quant data tends to be historical, incorrect and you have to break down the statistics to work out the level of risk.”

He relies more on meeting firms and cross-referencing with the three small-cap and three mid-cap fund managers on Axa Framlington’s UK companies team.

He says: “I know my strategy and my fund risk-reward profile so I can make a decision to buy or sell as soon as I come out of a meeting. Other managers may take two or three weeks to decide if they are using analysts and quantitive analysis.”

Whiteoak says the market volatility is producing buying opportunities. He says: “We have picked robust stocks that we have known for years so when the market fell we had a spread of stocks and sectors.

“When the market was strong, we took profits from these areas and made money on oil and resources stocks. We then sold the more risky resources stocks and bought cash-positive stocks.

“It has been a funny year. When the market was going up, it was difficult to pick up stocks and when it crashed there was no liquidity in small caps so it was difficult to sell anything.

“Any risky stocks we are buying is because they are falling and we believe by the end of the year their prices will be going up again.”

He says the original approach was to source firms with growth and pricing power because international markets were performing less strongly four years ago than the UK.

“Now the reverse is happening, with UK pricing power deteriorating, government spending slowing and international markets growing faster so our strategy is to get exposure to faster growing areas with strong pricing power,” he says.

The 160-stock fund, which has 260m under management, is overweight in higher-margin sectors such as healthcare, biotech, technology, aerospace and oil and resources, he says.

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