OMAM's Nickols strips cyclicals to up weighting to secular growth stocks

Manager sees businesses increasing earnings doing best in ‘anaemic growth' environment

Old Mutual’s star UK small-cap manager Dan Nickols is stripping cyclical stocks out of his portfolio and replacing them with secular growth. Nickols, who runs the UK Select Smaller Companies fund, believes, in an environment of anaemic growth, it will be businesses that increase earnings which will do best. Small caps had a big bounce back in 2009. Are they still cheap? At the current point in time, small caps as defined by the Hoare Govett Smaller Companies Index, which is the reference index we would use for the purposes of our small-cap fund, are trading on a 12-month forward mult...