Amanda Forsyth, investment director of the Standard Life UK Equity Growth Trust, has increased the a...
Amanda Forsyth, investment director of the Standard Life UK Equity Growth Trust, has increased the average number of holdings in the portfolio from 30 to 40 stocks.
Almost a year after taking over the portfolio from Jeff Saunders, who left last August, the fund has nearly trebled in size from £60m to £170m, which has led Forsyth to increase the average number of holdings.
She said: 'This makes the portfolio more liquid and means we are holding stocks that represent 2% of the portfolio rather than 3%.
The fund has been overweight the housebuilding sector, which was ideal over the winter months as interest rates were falling, according to Forsyth.
'In the past two months, we started to look at these holdings and reduced our exposure, as the strategy team suggested that the outlook for the UK economy was benign and inflation was going to remain strong. In fact, the recent inflation data took the market by surprise and really affected housebuilders,' she said.
At the moment, Forsyth is looking for companies that show good growth prospects, which, she said, is not easy to find in today's market climate. 'Currently, we like the retail sector and companies that are exposed to the US,' she said. 'If companies are exposed to the US, we like to have a defensive position because of the slowdown but we can see the benefit of the strengthening dollar. We hold Bunzl, a support services company that deals in paper and plastics and is exposed to the US.'
The fund has increased its weighting in the general retailing sector from nothing to 4%, according to Forsyth. 'This is part of the cyclical services sector, which is our biggest sectoral weighting at a quarter of the portfolio,' she said. 'Cyclical services are resilient in economic downturns as there is often a trend towards outsourcing in this sort of environment.'
Forsyth is more relaxed about paying higher multiples than her predecessor. She said: 'Saunders had more of a bias towards value, whereas I am happier to pay a P/E of 20 times, if necessary.'www.ifaonline.co.uk
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