The Witan investment trust is underweight UK and overweight US, while the Martin Currie Portfolio Tr...
The Witan investment trust is underweight UK and overweight US, while the Martin Currie Portfolio Trust is adding to both these areas.
James Robinson, manager of £2bn Witan trust, says the portfolio is underweight UK and overweight US equities, based on its internal benchmark of 60% FTSE All Share and 40% World ex UK indices.
Robinson says: "We have been a bit cautious on the relative performance of UK equities. This has been the right way to be over the past 12 months as the market has not moved a lot.
"We are now coming toward the end of that period and I have edged some money back in favour of the UK. If appropriate, I will continue to do so." In overseas equities, the portfolio is marginally underweight US equities. Robinson says although the macro-environment is not exciting he is finding some good stock opportunities.
Japan is overweighted, which was good news last year, but not so opportune now that the market is underperforming.
Robinson says: "We consider there is not much downside left from these levels so we will be retaining our position. The economic news coming out is positive, but this is failing to move the market."
Meanwhile he is neutral in the Pacific, but is particularly optimistic over the longer term. He says although rising interest rates are negative in the short term, the longer-term picture is promising.
Witan is overweight relative to its benchmark in Europe, but slightly underweight compared to its peer group.
The £230m Martin Currie Portfolio Trust has been reducing its exposure to Japan, based upon uncertainty about the pace of reforms, and the belief that stock valuations have got ahead of themselves.
Exposure to Asia has also been reduced, particularly in the semiconductor areas, where portfolio manager, Tom Walker, says he has become nervous after a period of strong performance.
He adds: "We have started to take profits in semiconductors. We are also starting to see a lot of money going into capital expenditure, so we thought it timely to reduce our exposure."
Meanwhile, Walker says exposure to North America has been added to Portfolio Trust, but this is stock specific, favouring the energy sector.
Walker adds: "We've also added to the UK, particularly technology stocks, which has been paid for by reducing our weighting in media."
The media companies being sold by Portfolio Trust include BSkyB, Pearson and Reid.
There have been insignificant changes in Europe, according to Walker. Although these changes have been made in the Portfolio Trust, they do not represent Martin Currie's house view, which is positive on Japan and Latin America.
The view on Latin America is based on expectations the US rate rise cycle is nearing its peak.
Martin Currie's house view, according to Walker, is underweight UK and North America, based on expectations of better opportunities elsewhere.
Walker says: "The North American economy is over extended and interest rates will have to increase more than else were."
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