OMAM’s Message tops up media holdings
Equity income manager hoping for increasing media dividends as interim reporting season looms.
Old Mutual Asset Managers’ Stephen Message has increased exposure to media companies in his £46.3m Equity Income fund in the hope of the companies increasing their dividend payments.
Mr Message (pictured) has brought in advertising giant WPP, broadcaster ITV and comparison website MoneySupermarket during the weakened markets of the early summer.
The moves have helped raise the fund’s exposure to consumer-facing sectors to more than 30 per cent.
“Given we’ve had fairly weak markets recently, it’s been a good opportunity to start positions in all three of those holdings,” Mr Message said. “I think they offer a combination of a good starting dividend and potential to grow their dividends further.”
The manager has also taken profits from his Top 10 holding in Legal & General and highlighted food wholesaler Booker Group and kitchen supplier Howden Joinery as potential strong stocks for the second half of 2012.
However, the manager warned that the summer interim reporting season would be an improtant indicator of how sentiment relating to the eurozone and economic growth was affecting individual companies.
Mr Message said: “Ultimately share prices follow the direction of profits and profits follow the direction of economies, and at the moment we’re not totally sure on the outlook for economies, so therefore the outlook for profit growth is probably a bit less sure than it has been.
“The reporting season will be important to see the degree to which the eurozone and the high oil price have fed into a slowdown in trading activity for businesses. I think it’s too early to say the degree to which that has happened.”
The Old Mutual Equity Income fund posted a 9.5 per cent return over five years to August 23, according to FE Analytics, compared with the IMA UK Equity Income sector’s 6.5 per cent average return.
Since Mr Message took over the running of the fund in November 2009, the fund has gained 29.3 per cent, compared with the sector’s 27.3 per cent return.