Dresdner RCM has restructured its UK Smaller Companies unit trust and switched it from a quasi-tech,...
Dresdner RCM has restructured its UK Smaller Companies unit trust and switched it from a quasi-tech, media and telecoms bias to a more balanced growth portfolio.
The changes follow poor short-term returns and the appointment of Neil Basten to manage the fund at the end of September 2000.
Basten said: 'At the end of September, the exposure to the technology, media and telecoms sector was about 55%. While we have reduced our exposure to 36%, we remain overweight and this has negatively impacted performance. Some profits were taken throughout 2000 but with hindsight we should have been slightly more aggressive in our approach.'
Basten, who joined from Norwich Union, has looked to reduce the risk at stock and sector level while still aiming to retain a growth bias, with the primary emphasis on stock selection.
He retains the objective of outperforming the index and peer group but is looking to do so via consistent outperformance.
The majority of Basten's recent investment has been aimed at consistent growth sectors, such as support services and healthcare.
In addition, he said the fund is invested in consumer cyclical sectors, such as leisure.
The portfolio is underweight engineering, chemicals, property and insurance.
Profit forecasts in general remain too high, according to Basten, and he expects further reductions over the next few months.
He said: 'The outlook for the second half of the year is better with lower interest rates benefiting the economy.
'UK smaller companies should benefit as their fortunes are more linked to the local rather than global economy.'
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