You are here: Home - Saving & Banking - News -

Resolution maintains blue chip bias

Written by:

Resolution Asset Management says it will maintain a predominantly blue-chip bias until British consumers acknowledge the extent of the credit crisis and tighten their belts.

UK focus fund manager Ralph Brook-Fox, whose £19m fund is top quartile over one, two and three years, says he refuses to ‘bottom fish’ among domestic FTSE Mid 250 stocks until there is evidence that consumers are scaling back their borrowing habits and showing signs of greater financial control.

Holding no retailers except Tesco, Brook-Fox is focussing on companies with significant overseas earnings and growth potential. He has added mining giant Anglo American on a recent pullback as well as the industrial company Smiths Group, where new management is expected to deliver improved performance.

Brook-Fox’s domestic exposure is very selective. He has recently added Lloyds TSB to his portfolio – reducing his financials underweight – believing that its strong deposit and capital base should position it well to take share from its more challenged competitors. He expects new holding Capita to continue to benefit as government budgetary constraints support the outsourcing model.

Despite his caution on the UK economy, Brook-Fox has no plans to add to his portfolio’s 28 stocks, arguing that each holding has been bought to outperform and there is no need to reduce the fund’s focus or dilute potential returns.

He said: “We believe we need to be blue-chip and global at the moment in terms of where we are seeking ideas for the portfolio, even if it can appear a little boring. We will only consider domestic midcap stocks when there is evidence that UK consumers are taking the challenging economic outlook on board and where forecasts become more realistic. That needs to happen before we can bottom fish – we would much rather play overseas earnings and international growth in the meantime.

“The Federal Reserve’s recent action has avoided Armageddon but there will still be significant real economy impact from the credit crunch and we need to get through it first.”


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Brits seeking alternative sources of credit

As a result of the credit crunch, more and more people are being forced to look for alternative sources of...