Threadneedle’s Simon Brazier enjoyed a strong first full year at the helm of the Threadneedle UK Select investment trust, according to its annual report and accounts.
Threadneedle won the mandate to manage the £38.8m trust from Swip in August 2012, since when Mr Brazier has aligned the trust with his open-ended Threadneedle UK fund.
In four of the previous six calendar years to the end of 2012, the trust’s shares underperformed the FTSE All-Share index, but since Mr Brazier took over, its shares have posted a return more than double that of the index.
The accounts for the year ending December 31 showed the trust’s shares gained 21.7 per cent during the period, while its net asset value rose 23.1 per cent.
In another strong year for UK equities, Mr Brazier highlighted overweight positions in the outperforming industrial and consumer discretionary sectors as key.
“Our underweight in materials was also positive as the sector was affected by Chinese GDP growth concerns and fears that some mining companies have been too slow to cut capacity and capital expenditure,” he added.
“Stock selection was positive in all sectors except energy, healthcare and utilities, and particularly strong in materials, financials, industrials and both consumer areas.”
Mr Brazier highlighted his position in BT Group, with returns from the fixed-line telecoms operator based on positive updates concerning its fibre service and demand for BT Sport. The company’s shares gained 64.2 per cent.
“Our overweight in the stock offset the effect of not holding Vodafone, which performed strongly on the sale of its stake in Verizon Wireless,” he added.
Elsewhere, the housing market recovery helped the portfolio’s position in Breedon Aggregates, which produces construction materials, as well as holdings in housebuilders Persimmon and Bellway.
“We believe the outlook remains encouraging at UK company level and continue to focus on well-managed, fundamentally strong businesses that have realistic potential to deliver positive earnings surprises, helped by selected exposure to growing global markets,” Mr Brazier added.
“Although corporate profits are growing and companies are increasingly putting balance-sheet cash to use, rising expectations have also created more scope for profit warnings.”
