The manager of the £2.2bn Rathbones Global Opportunities fund took advantage of the pandemic induced sell-off in global equity markets to spend £200m on buying more of the existing stocks he owned.
James Thomson, who has run the fund as sole manager since 2005, had about 7 per cent of the fund, or £200m, held in cash in February, but as soon as the market began its sharp descent in March, he began to invest the money.
He felt the fall in the share prices of some of his holdings made them more attractive investments, so he bought more, he said. The fund now has about 1 per cent of its capital deployed in cash.
The fund has returned 11 per cent this year to date, compared with a loss of 1.5 per cent for the average fund in the IA Global sector in the same time period.
Mr Thomson deploys the growth style of investing, which has generally performed well during the pandemic as investors have focused on companies that have predictable earnings.
The fund manager has little invested in Asian stocks, but said he is looking to Asia for hints as to the impact that the pandemic will have on companies around the rest of the world as they emerge from lockdowns.
He said it is apparent from Asia that there is a “V-shaped recovery” in certain sectors of the economy, and this may act as a guide to what investors in developed markets can expect.
He noted that consumer spending had rebounded sharply in Asia since the end of regional lockdowns, with luxury consumer goods companies such as Hermes performing particularly well.
Mr Thomson said: “When Hermes re-opened one of their stores in China, and it wasn’t one of their major sites, they sold $2.7m (£2.38m) of goods on the first day. I think the general events in Asia will be a good indicator of what we can expect in the rest of the world.”
Darius McDermott, managing director of Chelsea Financial Services, said: “We have been fans of James Thomson for a long-time.
"By his own admission he had a terrible financial crisis, and after that he added in some defensive growth stocks, and then, when there was a market sell-off in 2010, his fund performed very well, which showed the defensive allocation was doing its job. And he has had good performance during the pandemic.”