Artemis’s Tim Steer bets on dollar in UK fund
Mr Steer said that 80 per cent of the revenues of his top 13 companies were now dollar denominated.
He said positive economic news out of the world’s largest economy was likely to contribute to the strengthening of the dollar and therefore success of the companies in his portfolio.
The manager said he expected the US’s government deficit to decrease, which was “good news” for companies with exposure to dollar-denominated overseas earnings.
Mr Steer said the other major contributor to positive economic news from the US was the reduced cost of energy due to a natural gas surplus in the country.
The decreased cost of energy would be positive for speciality chemicals companies, such as Croda and Elementis, the manager said.
He added that the US has started exporting oil again, which would also favour related companies.
The manager said his top holdings were all benefiting from growth in the US economy. They include Aggreko – the world’s largest temporary power-generation company – Glasgow-based engineering company Weir Group and engineering giant Rolls-Royce.
Mr Steer said if positive figures continued to emerge from the US, its central bank, the Federal Reserve (Fed), would likely look at “tweaking interest rates”, in spite of an announcement from Fed chairman Ben Bernanke earlier this year that interest rates would stay low until at least 2014.
“Investors must not keep looking at the now and look at the record and the big picture,” he said.
The fund has returned third-quartile results over the five-year period to April 5, returning a loss of 2.3 per cent over the term, compared with an IMA UK All Companies sector average of 3 per cent, according to Morningstar.
The fund is top quartile over the three-year period, ranking 61 out of 272 companies in the peer group.