Columbia Threadneedle’s David Dudding has criticised skittish investors after the recent drawdown in global markets, telling them that “what’s in the papers is [already] in the price”.
Mr Dudding, who manages the £2.9bn Threadneedle European Select fund, said he had not allowed the market turmoil of last month to cloud his judgement, and that he had not done “much” to change his portfolio.
European equity markets were trading up to 20 per cent below their early 2015 highs in August, largely due to concerns over China’s plunging stockmarket and its slowing economy.
The manager said: “We tend not to make decisions as a result of macro calls – as to whether Greece is going to get bailed out or whether Chinese growth appears to be slowing.
“We do very little [in reaction to macro events]. Investors should always take a long-term view – it’s not what’s in the papers today [that matters].”
However, Mr Dudding – who tends to base his decisions on a time horizon of three to five years – has added to a few positions in light of the moves. He said: “We have topped up a few names, and we think some have been oversold.
“Meanwhile, there’s been no real shift [in the portfolio].”
The manager has also added slightly to existing positions, including Unilever, Novartis and RELX (formerly Reed Elsevier), which he said have good prospects in the medium term.
This is in spite of Unilever’s share price having taken a hit due to its partial reliance on sales from emerging markets.
“Unilever is a demonstrably better company than it was five years ago,” Mr Dudding said.
“We also think it will be a better company in five years’ time. The exposure to emerging markets is a massive opportunity in that time horizon.
“Being strong in emerging markets is good for [Unilever], and we expect growth to come from there.”
The manager noted that the firm’s move to focus more on the personal care sector was “an important transition”.
Similarly, he said Novartis was a “much better company than three or four years ago”, following changes to its management and recent drug discoveries.
Mr Dudding added it had been “a bit lucky” in discovering one or two blockbuster drugs.
As of July 31, the European Select fund had a 5.1 per cent holding in Unilever, 4.2 per cent in RELX and 4 per cent in Novartis.
More generally, the manager is overweight the consumer goods and healthcare sectors, and had a 25.3 per cent exposure to consumer goods and 23.4 per cent in healthcare in his fund at the end of July.
The portfolio has delivered 73.6 per cent in the past five years and 38.8 per cent across three years, data from FE Analytics shows.
Its peer group, the IA Europe ex UK sector, has returned 49.5 per cent across five years and 41.1 per cent in the past three years.