Bloombery today published an article which contains a number of interviews with leading UK fund managers. It is quite clear that there are some differing views on the market, particularly with regard to companies focused upon the UK consumer.
Paul Spencer, manager of Rensburg Fund Management Ltd.’s U.K. Mid- Cap Growth fund:
“Many U.K. stocks are already pricing in a very, very bleak environment so anything slightly better than that could give some of these domestic-facing stocks quite a lot of scope to perform well. I’ve probably taken a contrarian stance here.”
Richard Plackett, manager of BlackRock’s U.K. Special Situations Fund said:
“The U.K. is facing a very significant structural adjustment. A huge proportion of U.K. GDP is made up of either government spending or consumer expenditure. In both of those areas, growth is heavily constrained. You don’t want to be betting against the economic forces in the world right now.”
Richard Watts, manager of Old Mutual Plc’s U.K. Select Mid-Cap Fund in London said:
“I personally think they [firms with a high proportion of earnings from overseas] have got further to run, but I would suggest it’s more about stock selection within that particular part of the market that’s going to drive your relative return this year. Top-line growth will be difficult to come by for a lot of the consumer-facing businesses in the U.K. market. It’s hardly the most exciting outlook for U.K.-focused businesses.”
So the key questions are: (1) is all the downside risk now priced into UK consumer cyclicals; and (2) is all the upside risk now priced into global cyclicals?
- Fund managers’ bullishness at a record: survey (marketwatch.com)
- Franklin Templeton to acquire Rensburg Fund Management from Investec (newstatesman.com)
- Dare you buy a fund from your bank? (telegraph.co.uk)
- FundWatch: Fund managers’ bullishness at a record: survey (marketwatch.com)
- F.Templeton expands in UK equities with Rensburg buy (reuters.com)
- (BN) Rules for Hedge-Fund, Private-Equity Managers Ratified by EU Regulators (libreum.wordpress.com)
- Raging bulls (ftalphaville.ft.com)