InvestmentsAug 21 2015

JP Morgan’s Brittain on why she sticks with builders

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JP Morgan’s Brittain on why she sticks with builders

Georgina Brittain, manager of the JPMorgan Mid Cap investment trust, talks about her approach to investing in the latest FTAdviser video interview.

As well as revealing why she is excited about challenger banks, Ms Brittain explained to Ellie Duncan, deputy features editor of Investment Adviser, why she is sticking with house builders in her portfolio.

Ms Brittain said: “I am not buying in now as I have really been in this space for quite some time.

“Once upon a time we owned them in small cap and they got far too large for that investment trust so in mid cap, it has been and still remains a big position.

“We have made a lot of money and one of the tenets of how we work, and indeed of behavioural finance, is to run with your winners but there is a point when you say valuations have got out of kilter with the outlook and that is when you might take money off the table.

“You can argue that house builders, because they have gone up a lot and have done very well, some analysts would argue that on a price to book basis they are now expensive.”

“Our view is this is about time and place. We all know we need 250,000 new houses a year. They had Taylor Wimpey on the radio this morning and their chief executive said ‘maybe’ in five years time we will get to 200,000 a year.”

She added that supply is a “huge issue”, while there is no issue about demand, “as long as we are still comfortable with mortgage availability”.

“These companies learnt a lesson. I keep harking back to the financial crisis. Although it is seven years ago the companies we invest in learnt lessons.

“The house builders are being hugely more disciplined in terms of their growth and the profits and money they make.”

emma.hughes@ft.com