Bill Mott has unveiled the themes he will be following in the opening portfolio of the PSigma income fund.
At an event hosted by Winterthur, which has just added the PSigma income fund to its ‘Tailored Selection’ range of investment funds for both individual pensions and life products, Mott described how thematic investing works, and the areas he is concentrating on in the first fund to be launched by PSigma.
He says being a thematic investor is like “swimming downstream to the rest of the market” and requires the skills to spot when the future is going to be different from the past.
Mott adds: “It is about spotting the inflection points – at all market levels – as this is when you get the best investment odds. If you capture this on a macro level you could make enormous amounts of money.”
Equally, he says its is important to look at the whole market, as sometimes the inflection point is there, sometimes it is in a sector, and it can even be different styles or drivers of the market.
In addition, he points out there will always be stock inflection points, where people can make money, as one change or event can turn a stock around, with some examples in recent years being Marks & Spencer or Sainsburys.
However, going forward he says he has identified three key themes for the opening portfolio of the PSigma Income Fund, which closed its three week fixed price offer period on 5 April.
He says the recent merger and acquisition activity going on in the market means very big stocks have been left behind, creating an anomaly between the ‘megacaps’ and the rest of the market.
Mott adds: “I think this is where the big opportunities are and I would be looking for these to deliver the best performance going forward. Although it is seldom the best rewards come form the safest stocks.”
As a result, he says the opening portfolio of the fund will be “very heavily weighted towards megacaps”, although he says equally consumption in the UK will be suppressed by the level of debt which will improve savings and investment stocks.
He adds: “We are also taking an overweight position in some savings related companies. But in long term the best equity returns will come from companies with a pretty high exposure to emerging markets and particularly south-east Asia. So for the best opportunities we are also overweight in these companies.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7034 2681 or email [email protected].IFAonline
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