34
|
THE INVESTOR
THE INVESTOR CENTRE
All information correct as at 31 March 2015
M
arkets continued to test their historic
highs, with positive economic data in
Europe being particularly noteworthy.We
have increased our UK banking exposure,
where we feel stronger, leaner businesses
are emerging, with a clear line of sight to
generating attractive returns. However,
RBS’s poor results were generally not well
received, despite the fact that these are a
backward-looking measure and, to us, there
are clear signs that point to a management
teammaking progress.The other detractor
wasVodafone which, having risen 30%
between October and January, endured a
sluggish quarter. Companies bene ting from
the increase in economic activity gave the
portfolios the greatest boost. Food retailers
Tesco and Morrison continued on their
recovery paths with both announcing senior
hires.The market recognised another stock,
Rentokil, which has undergone restructuring
over the past year.With 50% of its business
exposed to the European consumer recovery,
we are strong supporters.Mondi, the leading
global packaging maker, revealed good
2014 nancial year gures, with a con dent
outlook for 2015. HSBC is a position we have
been building, a stock we have eschewed
in recent years due to its emerging market
exposure.The regulator has forced many of
HSBC’s competitors to retrench to their core
businesses, leaving the bank as one of the few
genuinely global players now trading on an
attractive valuation.
MAJEDIE
UK Growth
Joint manager: UK & General Progressive
Food retail and stronger banking
businesses give boost to portfolio
Tesco andMorrison
continuedon their
recoverypaths
Richard Staveley, Adam Parker, James de
Uphaugh, Matthew Smith and Chris Field
G
lobal equity markets were up for the
period.The US market continued
to rise, reaching new highs as companies
reported 2014 earnings and the dollar
strengthened further.The European
Union announced a four-month extension
to its bailout agreement with Greece,
although concerns about its ability to
service debts remain.The slowdown of the
Chinese economy also remains a concern.
Stock selection within the industrials
and telecommunication services sectors
contributed to performance; notable
performers included NipponTelegraph
andTelephone Corporation, Hutchison
Whampoa and Pearson. Stock selection
within the healthcare and consumer
discretionary sectors detracted from
performance.Viacom, Mattel andAmcor
impacted performance. During the period
we sold our positions in Safran and Raytheon
Company as both stocks approached our
estimate of fair value.We believe equities is
the place to be, given that interest rates are
at historic lows, and we believe bonds are
overpriced.The US market could continue
to outperform, although US equities appear
expensive in our view, particularly against a
backdrop of high margins.We believe that
opportunities exist in European companies
with international operations and favourable
equity valuations, especially if the euro
should weaken.
MANULIFE
Global Equity Income
Industrials and telecoms services
sectors contributed to performance
The slowdownof the
Chinese economy also
remains a concern
U
K equity markets have been on
something of a tear for the past six
months, with the UK Income fund making
good gains during Q1. However, one area
of concern is currency.There have been
moves in response to the expected increase
in interest rates in some economies that
would put pressure on selected stocks in a
number of markets.The stocks in which we
are invested have generally put in a creditable
performance. Consequently, we have seen
decent gains from a number of positions
rather than skewed returns from just a few
(with the exception of Vedanta, whose
share price has been volatile, making large
gains and losses over the past fewmonths).
Positive share price performance included
Pearson andTullett Prebon.The fund has
also bene ted in relative terms from not
holding large index constituents such as
HSBC, which reported weak earnings across
a number of business lines (albeit during a
period of signi cant restructuring). On the
other hand, the key loser during the month
was US retailer Best Buy. Not holding two
pharmaceutical stocks – GlaxoSmithKline
and Shire – also detracted from relative
performance.This is a stock-picking portfolio
where the focus is on companies undergoing
a cycle of improvement and paying a healthy
dividend to their investors while this plays
out; various stocks in the general nancials
sector t into this theme at present.
MAJEDIE
UK Income
Interest rate rise in the UK would
put pressure on selected stocks
We have seendecent
gains froma number
of positions
Chris Reid
Paul Boyne and Doug McGraw
