EquitiesMay 7 2013

GAM’s Hepworth expects the UK market to rally

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ByMatthew Jeynes

GAM’s Charles Hepworth has said the UK market will rally in the coming months, following its weaker performance compared with other world indices in 2013 so far.

The FTSE 100 index has delivered 10.4 per cent this year already. Other major stockmarkets have outpaced the UK’s benchmark index, including the S&P 500’s 16.9 per cent and the MSCI World’s 15.1 per cent, according to FE Analytics.

The manager, who runs the group’s discretionary portfolios, said he was adding to his UK exposure because he expected the market to strengthen in the near term.

Because of this view he said he had boosted his weighting in former Liontrust stars Jeremy Lang and William Pattisson’s £57.3m Ardevora UK Income fund and Richard Plackett’s £1.6bn BlackRock UK Special Situations fund after reducing exposure to Asia Pacific and emerging market funds.

Both funds have performed strongly, with the Ardevora fund delivering a top-quartile 28.7 per cent in one year to April 28 while Mr Plackett has produced top-quartile returns in three- and five-year periods, according to FE Analytics.

“Although we are still bullish on the medium-term prospects for emerging markets, the performance has been very disappointing in the past couple of years,” said Mr Hepworth. Elsewhere, the manager said he had upped his exposure to listed private equity, particularly the Pareturn Barwon Listed Private Equity fund, managed by Sam Armstrong.

Mr Hepworth now holds between 3 per cent and 4 per cent in his growth-orientated strategies.

“I had originally bought in because valuations in private equity were so low,” he said.

“The valuation argument has played out quicker than we thought and the fund has done very well this year but we are now seeing more activity in the private equity space as they are sniffing around more and more for deals, so I wanted to increase the exposure.”