Mark Webster, manager of the Exeter European Fund, has altered 10% of the fund's portfolio, since Ex...
Mark Webster, manager of the Exeter European Fund, has altered 10% of the fund's portfolio, since Exeter took over the management of the fund from Sanwa.
Webster started running the former Sanwa European Fund on 1 June this year. He said he is looking to concentrate the fund's portfolio down from the 72 stocks he inherited to around 50 stocks at first.
At Sanwa, the portfolio was managed on a core/satellite process, with large index companies providing ballast. Webster said he is looking to move away from this process and is not afraid to take big bets in some sectors and hold nothing in others.
Webster adopts a sector, rather than geographical, focus on the fund, as he said cross-border sector correlations have increased massively and volatility and sector rotation creates huge potential.
He said: 'Five to 10 years ago is was all about picking the right country, this is not the case anymore. There is now huge variation in sector returns, while, for example, the correlation between telecom stocks in France and Germany is now very close.'
To flag attractive sectors to take active positions in, Webster uses a quantitative database. Under this system he ranks sectors against 26 different factors and then puts each sector in order of preference.
At present, Webster is increasing the fund's weightings in technology and telecom equipment, media, financials, industrial goods and services and healthcare. He is decreasing the fund's positions in food and beverages, consumer goods and services and airlines.
In telecoms, Webster said that, while companies have been disappointing and valuations have become stretched, expectations of third generation (3G) technology may now have reached a low point.
His preferred stocks are Telefonica, which has performed robustly domestically in Spain, and Sonera and Telia, which plan to merge.
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