Justin Seager is positioning the Jupiter UK Growth portfolio towards the mid-cap area of the market ...
Justin Seager is positioning the Jupiter UK Growth portfolio towards the mid-cap area of the market and away from the leaders of the FTSE 100.
Speaking at the group's roadshows earlier this month, Seager told delegates that now is a time to be more positive towards the equities market.
The UK Growth fund had suffered badly in the third quarter of 2001, he acknowledged, but the short-term numbers are improving. 'I had a bad year in 2001,' he said, 'as I was too early going into small caps and growth stocks.'
Since then, growth stocks and the smaller end of the market have done well.
Seager is favouring asset managers as improving economies will see groups in this area benefit. He is also keen on construction as he believes private financing initiatives have resurrected the sector.
He said: 'The nature of this sector has changed completely, making it an entirely different beast than it was 10 years ago.'
Some of the stocks Seager is weighting highly in the portfolio include mining company Anglo American and retailer Woolworths.
He believes any anticipated improvement in the base metals supply chain will have an immediate impact on the share price of Anglo American. Woolworths is so cheap, he said, that the risk/reward of investing in the stock is tilted in his favour.
'It is capitalised at 17% of its annual sales,' he added. 'It only has to stabilise and perform moderately well to outperform at the price it is now at.'
At the same time, Seager is leaning away from areas of the market such as oils and financials, especially Far East banks. Japan devaluing the yen will have an impact on other markets in the area, he believes.
'Banks like HSBC are more expensive than our domestic banks,' he said. 'They are stocks with high glamour ratings but moderate expectations for growth and we prefer not to own them.'
Seager is playing on the idea that the economy will recover later this year but in the meantime he is looking to invest in stocks with structural advantages.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation