Aviva Investors' Henry Flockhart has turned over 40% of the UK Listed Equity Unconstrained fund since assuming control of the mandate in September 2018 and has bought into wealth management business St. James's Place.
Flockhart joined Aviva Investors' Edinburgh office from Standard Life Aberdeen in July along with seven other equity managers from the firm, taking over the £214.7m UK Listed Equity Unconstrained fund from Chris Murphy on 1 September.
The fund was subsequently renamed in January, having previously been called the Aviva Investors UK Equity fund, as part of the firm's move to ensure the UK equity OEIC range is "clearly targeted and differentiated".
The investment strategy and risk profile of the fund remained unchanged, with the objective to provide a combination of capital growth and income over five years or more by investing in the shares of UK companies.
Flockhart bought into St. James's Place in September when he was appointed manager, taking a 100bps position. He then topped up the weighting when the shares subsequently weakened during the Q4 volatility with the holding now 300bps, just outside the top ten.
"St. James's Place offers advice to people who have to make financial decisions post pension freedoms. Many of the other players have been restricted because of the Retail Distribution Review but the flow generation has been very stable over time at St. James's Place," Flockhart said.
"The company previously traded on a high multiple but it de-rated significantly during the volatility last year; it was on 19x during September but now it is on a forward P/E of 15.5x. It has a higher free cashflow yield now than at any point in the past three years,
which converts to an attractive dividend yield.
"We do not hold [competitors] AJ Bell or Hargreaves Lansdown as they are on high valuations. We like their structural positions, but the relative value is more attractive in St. James's Place."
Since taking over, Flockhart has turned over 40% of the portfolio, with 17 of the 43 positions new holdings, which he attributed to "volatility giving rise to opportunities". There were 45 companies in the fund when he was appointed.