By Robert Stock Capel Cure Sharp (CCS) is maintaining its high weighting to new economy stocks even ...
By Robert Stock
Capel Cure Sharp (CCS) is maintaining its high weighting to new economy stocks even though this has dented performance across its UK range in recent months.
The group, which is currently increasing the tech, media and telecoms exposure in its UK Growth fund, has a strong new economy strategy which prospered prior to the mid-March corrections
Since then performance has dipped with the CCS Ethical fund, the CCS UK Opportunities and CCS UK Growth fund plummeting down the sector rankings for short-term performance.
On 30 May the CCS Ethical fund was ranked 318 out of 327 funds in the UK All Companies sector with negative three month returns of 17.28% on an offer to offer with income reinvested basis.
The CCS UK Opportunities fund was ranked 288 with negative returns of 8.4%, and the CCS UK Growth Fund was ranked 285 with negative returns of 7.93%.
Barry Russell, director of investment fund development said that, despite the setbacks, the CCS tech, media and telecoms investment policy, which is common between the three funds, remains undented.
Russell said there is both formal and informal information sharing between fund managers Logie Cassells of the UK Growth fund, Fleur Leach on Ethical, and Kenneth Levy on UK Opportunities.
Russell added: "We have been looking at the world through new economy tinted glasses since 1995. We were very early into this story and it has really paid off. There are times, such as this time last year, when we are out of fashion, but our long term strategy belief is that it is the new economy stocks that will be the big winners of the future."
Cassells, manager of the £42m, 120 stock CCS UK Growth fund, said: "It is important for people not to become too besotted with the short term. I agree that our performance from March will not look very good, but if you measure it from the start of the rally in October 1999, the performance is respectable." According to Lipper, the CCS UK Growth is top quartile over six months, one year, three years and five years, CCS UK Opportunities is first quartile over one, three and five years, and CCS Ethical, which was launched in March 1998, is top quartile over six months and one year.
Cassells added that in October 1999, the UK Growth fund was well above the benchmark FTSE All Share new economy weightings, with 16.5% in telecoms, 7% in media, and 9% in IT. By December those positions had grown to 20%, 8%, and 22%.
In January and February Cassells trimmed the telecoms weighting back to 16%, and IT to 10%, with media remaining at 8%.
Now following the correction in tech, media and telecom stocks, he has begun to buy again.
When trimming back on his positions Cassells did not liquidate any holdings completely and is using the current period as a buying opportunity to build on the fund's current positions.
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