Some Expert Views I went to The City earlier this week, to listen to the views of some very well-respected fund managers, whose funds have performed very well, so thought some highlights would be worth feeding back. The company was Cazenove, who have recently become part of Schroders, a much larger group and, if you’re our client, you may hold one of their Multi-Manager Diversity’ funds, which have been on our recommended list for a while now. Most fund management companies have a house style of philosophy, even if that is that they don’t have a house style and it’s up to each manager to do his own thing. In Cazenove’s case, they follow the ‘business cycle’, which means that, generally, they’ll invest in certain types of company when the economy is in ‘bust mode’ (things we can’t do without, like food and medicines, Tesco and Glaxo for example), changing as things improve (with some banks and insurance companies now beginning to thrive again). With regards to prospects for our economy, their UK manager says ‘it’s hard to argue with the embarrassment of positive economic data around’. Companies still have record amounts of cash, which they’re not yet spending, so look out for more takeovers and mergers. Forecasts of their profits will improve, which should make share prices rise. Overall the UK stockmarket is up around 130% since it’s low point in 2009, but has, as we know, been up and down over the past few months. Europe and the Euro has been the other big story in recent months and years. There are many signs of things getting better there: more houses being built in Spain and Portugal, advertising prices rising, the sort of things that fund managers look for. However, in many of these countries, the government accounts for over half of economic activity, so it’s the politicians and not businesses, for better, or usually worse, who have the biggest role to play. Often the best growth potential (but also biggest risks) are found in the Smaller Companies sector. Interestingly, the UK has 4 x as many smaller companies relative to our population, than the US, which is supposedly the nation of entrepreneurs. Also interesting, thought, that the cash realized by Vodafone this week could buy the whole of the Smaller Companies sector twice over! Those are some headlines which you might find interesting and not, I hasten to add (to avoid reams of disclaimers) a recommendation that you should invest with either Cazenove or in any particular stock market. Our ‘house view’ is that, particularly if you’re looking for growth rather than income, we should research, where possible meet and listen to, and then recommend portfolio managers whom we leave to make those detailed decisions about how much to have in the French/German/Japanese etc stockmarket, for the level of risk appropriate to you.
Posted on: Sun, 08 Sep 2013 12:29:04 +0000
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