EquitiesApr 24 2014

Fidelity’s Dan Roberts ups cash weighting

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The manager of the £87m fund has moved from a 3-5 per cent cash position to an 8 per cent allocation after selling off some Japan and industrial holdings.

Mr Roberts said: “[Cash] is higher than I would like it to be in an ideal world.

“That does reflect the difficulty I am having in finding new ideas within the broader market. I am struggling at the margin to find table-thumping good ideas.”

He added that earnings have not kept pace with recent market rallies, which are becoming more reliant on strong earnings growth coming through to drive the market higher. Mr Roberts said he thought corporate profitability looked stretched and the prospects for earnings growth were “pretty bleak”.

“At the current levels of profitability, if you expect this historic relationship to hold you are looking at an actual fall in profitability over the coming three or four years from here.”

The manager said Japan and the US were the regions expected to increase payouts the most this year, although he admitted this may be partly due to the level rising from a lower base than in the UK and Europe.

The Fidelity Global Dividend has a historic yield of 2.85 per cent. Since its launch in January 2012 the portfolio has gained 34.2 per cent, ranking it seventh out of 26 funds in the IMA Global Equity Income sector for that period, according to FE Analytics.