Manager favours South African consumer stocks and Asian/Central Europe financials
J.P. Morgan’s Emerging Markets Alpha Plus fund manager Ashraf El Ansary has halved exposure to IT stocks to 10%, after recent strong gains from the sector.
El Ansary, who took over management of the $218.4m Luxembourg-domiciled Sicav from Christopher Morrell in February, has cut back exposure to IT companies after his predecessor increased the portfolio’s weighting to the sector from 6% to 20% through the final quarter of 2009.
The manager has used the proceeds to buy South African consumer stocks and Asian and Central European financials.
The fund’s weighting in financials grew from 20% to 24% during February as a result.
“In IT stocks, valuations were reaching levels that made us think there were better opportunities elsewhere,” client portfolio manager Emily Whiting says.
“From the Asian financials, we are now seeing valuations at an attractive level. They have been lagging the wider markets and therefore we feel they represent a good opportunity.
“Ashraf feels there is enough sustainable growth within these companies to justify the valuations they are at now and we still feel further upside from them.”
The fund, which varies its exposure to the market through a combination of hedging and cash, has increased its net exposure from 60% to 80% over the past month, Whiting says.
“The things holding us back from being even more bullish are the headwinds from both Chinese and Asian tightening and the fact we still have this ongoing Greek sovereign debt problem, which has yet to be resolved,” Whiting adds.
“Ashraf is clearly positioning himself so if we start to see even a bit more clarity on these points, we would be looking to invest more.”
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