EquitiesJun 1 2015

‘You don’t pick stocks in a vacuum’

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He remarks: “Certainly over the past 30 years I’ve seen a range of economic environments. The pre-credit crunch period is very different from the post-credit crunch period. Pre-credit crunch, we had a lot of economic cycles. We’ve seen a lot of shades of politics.

“As a broad generalisation, the Thatcher era and post-[Thatcher] free market economics reigned supreme. People believed in free markets and that was the best thing for everyone in terms of creating wealth.”

But he concedes: “What’s changed, of course, is governments have become far more interventionist since the credit crunch. Banks are the most obvious example. Before the credit crunch it was very much light-touch regulation; now we’ve had a reaction to that after the credit crunch with a lot more focus from government and a lot more regulation.

“That’s a fact of life for quite a few industries and understanding that dynamic is quite important.”

Mr Cholwill sold out of his domestic bank holdings in light of the financial crisis a number of years ago, continuing to hold only HSBC. He also tries to avoid companies that have become “political footballs”, such as energy suppliers and rail companies.

The popularity of UK equity income funds has endured, in part thanks to star managers such as Neil Woodford and now Mark Barnett at Invesco Perpetual. Mr Cholwill remembers it as a popular sector even when he was starting out in the business, although he has seen its appeal to investors change over the years.

He observes: “If you look back, typically equity income funds were outperforming all company funds and there was an element [of thinking equity income] strategies worked very well as total return strategies.

“But post credit crunch there’s been an extra dimension to the attractiveness of income strategies: that obviously we’re in a world of very low interest rates where income is much harder to come by.”

Turning to how he spends his time outside work, Mr Cholwill is adamant being able to “switch off” is vital. “The key thing about fund management is not allowing yourself to get stale,” he says. “You need to continue to have fresh ideas and fresh thinking.

“Creativity and inspiration are important too – it’s not all spreadsheets. Spreadsheets are good but being a judge of people is important as well in investment.”


Martin Cholwill

2005 – present

Senior fund manager, UK Equity Income fund, Royal London Asset Management

1996 – 2004

Fund manager, UK Equity Income fund, Axa Investment Managers

1994 – 1998

Fund manager, General Trust, Axa Investment Managers

1991 – 1996

Fund manager, UK Growth Trust, Axa Investment Managers

1983 – 1991

Investment analyst, Axa Investment Managers

1981 – 1983