Asia manager Andrew Graham is considering increasing exposure to his worst-performing stock, SJM Holdings, after it suffered in 2014.
The manager of the Martin Currie Pacific Trust said the cash levels in his fund had built up to 7.5 per cent from 5.8 per cent in December, and he aimed to increase exposure to the casino operator that impeded his performance the most last year.
SJM Holdings’ share price had fallen 52 per cent in the past year from HK$24.60 (£2.05) to HK$11.80, according to data from Bloomberg.
Mr Graham said he had reduced his exposure to the stock last year but wished he had done so further after a crackdown by China on the gaming industry hit related company stocks. But he is now considering topping up the holding after it had such a tough year.
“When there is uncertainty it makes investors nervous, but as fund managers we have to go to the uncomfortable places,” he said.
Elsewhere, Mr Graham said he had been reducing his exposure to India, based on his view the risk-reward ratio had become unrewarding after a major boost driven by the election of Narendra Modi last year.
India made up 14.9 per cent of the £134.6m trust at the end of January, compared with 17 per cent at the end of December 2014.
The manager said he had been reducing exposure to some Indian businesses and had sold out completely from Hindustan Unilever, a consumer goods company based in Mumbai and owned by Unilever.
He said: “The stock price is based on the assumption of high growth and it is very aggressive. The risk-reward ratio isn’t worth it.”
