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Eight wealth managers reveal their top H1 calls

Millennials’ spending power and disruptive tech are the themes our readers favoured in the first half of 2018.

Robert Ward

Chartered wealth manager, Walker Crips, Wymondham


‘After a year of gains in 2017, this was always going to be a tough act to follow, but opportunities were still there to be found.

'Sticking with the fundamental belief that technology will continue to strive over the long term and dispelling the frequent calls that this sector is in “bubble territory”, I have continued to buy into Polar Capital Technology trust.

‘There have been plenty of dips in this investment over the past six months, but I have taken these as buying opportunities as opposed to reasons to sell.

'With the strong underlying investments such as Alphabet, Apple and Amazon continuing to report both strong growth and earnings, the trust has produced a return of 12.5% over the last six month period and has been a positive driver for performance.’ 

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Robert Ward

Chartered wealth manager, Walker Crips, Wymondham


‘After a year of gains in 2017, this was always going to be a tough act to follow, but opportunities were still there to be found.

'Sticking with the fundamental belief that technology will continue to strive over the long term and dispelling the frequent calls that this sector is in “bubble territory”, I have continued to buy into Polar Capital Technology trust.

‘There have been plenty of dips in this investment over the past six months, but I have taken these as buying opportunities as opposed to reasons to sell.

'With the strong underlying investments such as Alphabet, Apple and Amazon continuing to report both strong growth and earnings, the trust has produced a return of 12.5% over the last six month period and has been a positive driver for performance.’ 

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James McDaid

Investment manager, GAM, London

‘After such a strong 2017, it would have been very tempting to take profits on those funds with large exposures to the technology sector.

'However, we decided to hold firm going into 2018 despite the large drawdown in early February and concerns over data privacy for firms such as Facebook.

‘There are several key themes within the sector such as digitisation, cloud computing and storage which should remain in place even if the recent synchronised economic growth falters.

‘On top of this, valuations for the sector are, surprisingly, close to lows relative to the broader market.’  

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James Hughes

Investment manager, WH Ireland, London

‘We have been adding the Goldman Sachs Millennials fund in order to provide clients with exposure to the changing environment that we find ourselves in. 

'There are currently 2.3 billion millennials around the world, which compares to 1.4 billion generation X and 1.2 billion baby boomers.

‘As millennials enter the workforce and reach their prime earning years, their aggregate income will surpass all other generations. It is estimated that they will spend 15% more over the next five years, while baby boomers will spend 10% less.

'The fund attempts to benefit from those companies exposed to this rising wave of new money.

‘The fund has returned 13.37% since the beginning of the year, which compares to the FTSE World index return of 2.15%.’ 

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Richard Morley

Investment Manager, Brewin Dolphin, Manchester


‘If you believe that the rapid global acceleration and adoption of technology will continue to disrupt traditional industries like high street retail, banking, pharmaceuticals and manufacturing, then Scottish Mortgage investment trust is the investment to buy. 

‘As a long-term holder of the trust, I’ve seen the effect of its blistering performance (doubling over two years and more than quadrupling over five years) and appreciate how it can hedge against the traditional sectors in a diversified investment portfolio. 

‘However, despite being catapulted into the FTSE 100 it comes with a reasonable degree of volatility which some investors may not be prepared to accept, particularly at what could be portrayed as the “top of the market”.

'That said, adding to the trust on short term weakness (as we did in February) seems very sensible for the investor with a long-term approach.’ 

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Ryan Hughes

Head of active portfolios at AJ Bell - London

'Having launched our Active MPS in February 2018, we have made a lot of investment decisions to get to our initial portfolio.

'The temptation could have been to build the portfolio for the current momentum market, however, the best decision we have made is probably the use of Troy Trojan Income in our portfolios.

'Troy is defensive in its positioning and will always lag in periods of strongly rising markets, which is demonstrated during April and May when it sharply underperformed.

'However, the recently volatility in markets has been a timely reminder as to the benefits that Francis Brooke’s conservative approach can bring to a portfolio, which provided a good level of protection as the market fell back.

'With the potential for volatility to stay elevated and perhaps increase further, this contrarian approach will hopefully prove to be very wise.' 

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Kasim Zafar

Portfolio manager at EQ Investors - London

'Our decision to hold fire in February and March when the market was reeling in the initial reaction to President Trump’s Trade War rhetoric certainly paid off.

'We recognised the bout of volatility as having no link back to underlying economic or company fundamentals and our analysis of trade wars at that time led us to hold course.

'Since then, the motivation behind the US position on trade led us to look at Europe. Not only was sentiment at unsustainably high levels but in our view, Europe is far less dynamic than either presidents Trump or Xi.

'The risk is that the internal bureaucracy of Europe will slow it down in reaching a trade resolution with the US. In May, we made a tactical shift to reduce our overweight to Europe in favour of the US and UK.' 

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Ahmer Tirmizi

Investment Manager, Seven Investment Management (7IM) - London

'Whilst arguably down to serendipity as well as judgement, our stand out call so far this year is perhaps the EuroStoxx 50 put option, placed five days before the significant market falls we saw in early February.

'The option had been struck precisely to protect against a potential return to volatility following a period of earie calm for markets. With an expiration date of December, we hadn’t anticipated that we’d be taking profits so soon – we never intended to be switching in and out of positions in the space of a few days!

'To put the trade into context, the put strike was 3450, around 5% below the market level at the time. After two days of violent moves and a large spike in volatility, we exited the position with the value of the option up 60%.' 

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Gareth Howlett

Investment director at Brooks Macdonald - Edinburgh

'We are long-term investors and as such we accept that the success or failure of an idea may only become apparent after a delay of some years.

'It is too soon to say which decisions we’ve made in the first half of 2018 will work, or have worked so far this year, because the period is too short. So here are a couple of ideas we had several years ago which are now paying off.

* 'Monks Investment Trust: the managers (Baillie Gifford) changed their investment team after a prolonged period of underperformance.

'We saw a buying opportunity. Since then, net asset value performance has rebounded in both relative and absolute terms and the discount has vanished.' 

* 'AIM stocks: exposure to the Alternative Investment Market through our in-house AIM fund has generated strong performance and acted as a diversifying asset.' 

 

 

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