Jupiter Income fund manager Tony Nutt sees the lack of direction in the FTSE All-Share as a boon for...
Jupiter Income fund manager Tony Nutt sees the lack of direction in the FTSE All-Share as a boon for stockpickers, writes Jenne Mannion
The manager of the £1.51bn portfolio has had a good 13 months since taking over the portfolio from William Littlewood. Over one year to 15 May it is ranked 17 out of 89 in the UK Equity Income sector, up 8.3%, offer to bid with net income reinvested.
On a three year view the fund is ranked 6 out of 83 funds in the UK equity Income sector, returning 22.8% after charges compared to the sector average of 5.4%.
Nutt said: 'The tough market environment has provided us with some strong opportunities. In particular we have been focusing on value companies.'
Financials is one area where Nutt has been building up exposure with holdings including Standard Chartered, Barclays and Bank of Scotland.
He has also added to the mortgage banks Alliance & Leicester and Northern Rock.
Nutt favours the capital goods, building, energy and property sectors, where he said the future is not exciting, but solid.
He believes there are plenty of opportunities among mid caps, but he has found it difficult to come by top line growth among the largest companies in the UK.
'The FTSE All-Share Index is unlikely to deliver particularly strong returns this year, rather like last year,' Nutt said. 'Active managers will beat passive managers again this year ' probably handsomely.
This is because they can stockpick and also because some of the drivers to All-Share returns are already fully valued and unlikely to make significant headway.
'However, if you pick a medium or small cap company that is still in the process of growing, yet is undervalued because it has been largely ignored by the market, then there is scope for some decent returns.'
Despite the portfolio's size Nutt has not found a liquidity issue when buying into stocks, although he said he has had to invest early with his stock ideas. The portfolio is diversified across 150 companies.
The largest holdings within it include Associated British Ports, Liberty International, British Telecom, Royal Bank of Scotland, Land Securities and Old Mutual.
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