Why Majedie's Reid is making his Income fund more concentrated

Chris Reid, manager of the Majedie UK Income fund, has been topping up his highest conviction positions and increasing the portfolio's concentration, in the expectation divergence between winners and losers will increase.

The allocation to top 10 stocks now ranges from just over 3% to 5% in one stock, with 40.6% concentrated in the top 10 holdings. The total number of holding is now just over 50, closer to the bottom of the 40-70 stock range the manager targets. "We are trying to focus on stocks where we know what is going on and reduce the overall number of positions," Reid (pictured) said. "For example, one of my top stocks, Rio Tinto, has a strong balance sheet, so we ended up buying more [now at 4.5%]." Recently, the manager sold his holding in RSA Insurance Group and used the cash to top up his...