The £10.1m Newton Pan-European Fund is building up a bias towards cyclicals and is favouring the Ger...
The £10.1m Newton Pan-European Fund is building up a bias towards cyclicals and is favouring the German market.
The unit trust, managed by Joanna Bowen, was launched seven months ago and has risen to the number one spot place over three months in its peer group of 12 funds.
Bowen said the allocation toward cyclical stocks had increased on the back of improved expectations for global economic growth.
She said: "The fund has invested in undervalued stocks that are exposed to an uptick in the global economy.
As a result the portfolio is overweight in basic industries, general industrials and the mining sector.
Telecoms exposure had been reduced and the portfolio is underweight the insurance sector. Pharmaceuticals exposure has also been reduced as Bowen believes they have been too highly rated.
Bowen says the prospects of significant corporate tax reforms in Germany have prompted her to be overweight in that market.
She said: "We had bought Deutsche Bank in anticipation the company would benefit from tax changes.
Some 34.97% of the Pan-European Fund is invested in the UK. France has 16.68% of the assets followed by Germany at 16.06%. The portfolio has exposure to Italy of 4.39%, Netherlands at 9.62%, Sweden at 6.91%, Switzerland at 4.8%, Spain at 4.68% and Portugal with 1.89.
Bowen is also a believer in the benefits of corporate restructuring, citing the mergers of Total and Elf in the oils sector and Volvo and Scania in the auto sector as examples of deals which could realise significant shareholder value.
Top 10 holdings are Shell Transport & Trading Co with 3.14%, Linde at 2.74%, Rhone-Poulenc at 2.58%, Ericsson at 2.55%, Granada Group with 2.49%, Société Générale with 2.47%, Telecom Italia Spa at 3.47%, Mannesmann AG with 2.46%, Total at 2.41% and ING Group with 2.34.
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