aggressive growth fund began trading on 1 october and is 75% invested, driven by individual stocks and opportunities in small cap market
Trading for the BWD Rensburg Aggressive Growth Fund has begun cautiously having missed the FTSE bounce from 4,200 to above 5,000, by one week.
Mark Hall, fund manager, said that the fund begun trading on 1 October, which did not prove the greatest timing following the huge bounce in the market the week before.
Hall said: 'Following the first two weeks of the fund we are now 75% invested, most of this money has been put into mid and small caps, which is where we are finding the most attractive opportunities.'
Hall said that at the moment there are not any major themes in the market, and as such the fund is being driven by individual stock ideas.
He said: 'There were some buying opportunities in the budget airline carriers around the time of 11 September, like EasyJet, but the fund was not up and running at that time, and since then these stocks have come back in value.'
He said he has also been looking at some tour operators, but he remains cautious until the risk of further terrorist attacks diminishes.
Hall looks at two main things when investing. He looks at situations which are significantly undervalued and where the downside risk is limited but the upside is substantial.
He said he puts anywhere between 3-5% of the fund in these ideas, and then waits for the market to value them more correctly. Examples of this philosophy are two stocks he holds, Wembley and Go-Ahead, he added.
Wembley has a slot machine gambling business in the US which has made £35m in profits, it owns a greyhound business in the UK, which has made £3m profit, and it owns £50m of land in or around Wembley Arena.
Hall said the company has strong balance sheets and is debt free, and given its current market value of £240m, he believes it is undervalued.
Go-Ahead is a bus, rail and aviation operator which has seen its stock price fall from £9 to £6 on the back of weak trading sentiment following the events of 11 September.
Hall said the fall in price has been an overreaction, noting the bus operation alone is worth the company's current market cap of £331m alone, so you are getting exposure to the train and aviation services for nothing.
At the other end of the spectrum, Hall said that by only having a fund of £2m he is able to look for short-term trading ideas in the market, giving him the ability to exploit the volatility and news-flow in the market at the moment.
Hall said: 'A combination of the two processes, the long-term idea philosophy and short-term one, we hope we will be able to drive the funds performance.'
Hall said that it is too early to tell what will happen to the FTSE over the next few months, and that if things do turn nasty, while it would not affect his long term holdings he would become more cautious on his short-term ideas.
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