PSigma’s Cumming increases defensive exposure

PSigma’s Neil Cumming has increased exposure to defensive integrated oil companies in his UK Growth fund on the belief investors currently have a ‘too rosy’ view of the future.

Cumming has boosted holdings in oils to 20.9%, adding Royal Dutch Shell ‘B' to existing positions in BP and BG, while moving to an underweight position in mining stocks.

The manager is also bullish on life insurance companies, currently 5.6% of the portfolio, which includes stakes in Prudential and Aviva. He has also boosted exposure to AstraZeneca, J Sainsbury, Wm Morrison, Reckitt Benckiser and Compass Group.

But Cumming has disposed of a number of holdings which he says appear overvalued - including Rolls Royce, Bodycote International, Invensys, Phoenix IT, Aggreko and AMEC.

"With the FTSE 100 ensconced above 5,000 it is easy to regards all as being rosy in the garden," Cumming says.

"There are however, still many challenges ahead, the greatest of which is that the global economy has not re-balanced."

"Whilst many countries, including the US, Germany and France, have clambered out of recession, the UK still posted negative GDP growth in the third quarter. Whoever wins the 2010 general election needs to dramatically cut the budget deficit and traditional methods are to raise taxes and cut public spending."