BWD Rensburg is altering the investment strategy on its Equity Growth unit trust to include investme...
BWD Rensburg is altering the investment strategy on its Equity Growth unit trust to include investment in European equities.
BWD Equity Growth, which is managed by Mark Hall, is looking to build up its exposure to European equities to around 15% over the next 12 to 18 months.
The fund will not need to alter its investment remit for the time being, however, as its remit already allows up to 20% to be held in overseas equities.
If exposure approaches 20% then the group would look to get unitholder approval to alter the fund's remit.
The move is being made as the group believes it is becoming increasingly important to get experience in European equities with the possibility the UK will join Emu within the next few years.
Hall is looking to add European stocks, such as Ericsson, which offer exposure to markets which cannot be achieved by focusing entirely on UK stocks.
He will focus on a universe of the top 350 stocks in Europe by market cap.
BWD Equity Growth is ranked 109 out of 232 funds in the UK All Companies sector over three years to 23 August on an offer to bid basis, on growth of 37.2%. The fund is 121 out of 285 over one year, on an offer to bid basis, on growth of 8.7% and is 140 out of 302 over three months on growth of 9.2%, on a bid to bid basis.
In a related move, Hall has been replaced as lead fund manager on the £28m BWD Balanced Portfolio so he can concentrate on Equity Growth. Colin Morton, who also manages BWD UK Equity Income, will now run the frA-rated Balanced Portfolio, which is to be renamed BWD UK Blue Chip Growth.
The fund has traditionally invested in UK blue chip stocks and has been renamed to more accurately describe its portfolio.
Morton said: "The focus on quality companies that has served the Income fund well will remain but clearly the freedom to embrace a wider range of growth opportunities is a welcome proposition.
"The bonus for me is that it gives me a chance to look at different types of companies.
"We are not looking to invest in companies with a P/E of 250 for example. I will be looking for growth at the right price."
Around 70-75% of BWD UK Blue Chip Growth's stocks will be similar and similarly weighted to Morton's holdings in UK Equity Income.
Another 10% to 15% of the fund will be made up of similar stocks to UK Equity Income although the weightings will be different.
For example, UK Blue Chip Growth will be able to be more fully weighted in stocks like Vodafone than UK Equity Income.
Around 10% to 15% of UK Blue Chip Growth will be available for new investment ideas such as technology stocks.
The fund currently has around 80% in FTSE 100 stocks, 13% in mid caps, 4% in small caps with the balance in cash.
BWD UK Blue Chip Growth is ranked 113 out of 232 funds in the UK All Companies sector over three years to 23 August on growth of 37%, on an offer to bid basis. The fund is 173 out of 285 over one year, offer to bid, on growth of 5.9% and is 157 out of 302 over three months, bid to bid, on growth of 9%.
BWD UK Equity Income has an frAA rating and is ranked 16 out of 85 funds in the UK Equity Income sector over three years on growth of 39.1% on an offer to bid basis.
The unit trust is 27 out of 92 funds over one year on growth of 3.1% also on an offer to bid basis. Over three months the fund is 30 out of 94 on a bid to bid basis on growth of 8.8%.
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