Citywire A-rated Nickols has increased his already overweight exposure to the UK’s housing market, as well as to the more advanced recovery in US stocks. He has also closed a long standing underweight to financial stocks with the addition of selective specialist stocks in the sector.
The most recent financials additions were a 1% fund stake in private bank Close Brothers, while he has also topped up his 2% core holding in Jupiter on recent weakness.
A new position in F&C has also been initiated in the past few weeks, and with Nickols also holding specialist lenders Paragon and International Personal Finance, the financials fund weighting has gone from a 2% underweight to a 1.5% overweight position.
He told Citywire Selection: ‘Jupiter has given a bit back recently [after recently trading at its highest premium to the sector] but we think it is relatively attractively valued now and a high quality franchise.’
The addition of F&C was more of a fixed income play for Nickols and he sees the asset manager as having further grounds to improve margins further under the stewardship of chairman Edward Bramson.
‘We expect to see further cost savings ahead for F&C and we like International Personal Finance because of its focus on developing economies in Latin America where lending is still very underdeveloped.’
At the end of the year Nickols also increased his exposure to general retailers, having been underweight the sector for some time due to pressures on consumers’ spending power.
With capacity coming out of the market and with the latest UK employment numbers slightly better than expected, Nickols has added to his stake in DSG International as it continues to benefit from the demise of rival Comet.
Over five years to the end of December the fund has returned 45.6% compared to 44.3% by the Numis Smaller Companies (-InvTrust) TR benchmark.