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A spotlight on Wise Investment's private client performance
Markets
by Annabelle Williams on Aug 30, 2012 at 07:00
Tony Yarrow, director, adviser and fund manager at Wise Investment, talks to Citywire about non-cyclical cyclicals and non-bank financials.
Positioning
Over the last year Tony Yarrow has raised the equity weighting in his TB Wise Income fund to 70% from 59%. He has focused on finding ‘things which look like cyclicals but are a lot less cyclical than you think’, and singles out UK estate agent Savills as a case in point.
‘Normally you wouldn’t want to own an estate agent in a market like this but for a start they are very upmarket and a very global one. They have a strong business in Hong Kong, they do property and facilities management – and that has 1.3 billion square feet under management,’ he said. Savills has a thriving fund management business and 60% of its profits are non-transactional, he adds.
The fund has a 20% weighting to property, and the 10% balance is invested in fixed interest, mostly direct holdings in financials. One call in that space is Aviva, a company that Yarrow believes is undervalued and is currently paying a dividend of 8%-9% dividend.
Performance
The fund has returned 10.26% on a total return basis over the year to 14 August compared to a 9.61% rise by the FTSE 100.
Yarrow’s single best call was a position in the Standard Life Property Income trust, run by Jason Baggaley. ‘He’s just done well with it. He’s a man after my own heart.’
At the other end of the spectrum, Yarrow made a loss on the international conglomerate Vivendi and is unlikely to back the stock again.
Another less successful call was small UK company Morson, which impressed Yarrow initially but later launched a Brazilian venture and made an attempt to take itself private. The saga was a ‘disaster’, according to Yarrow.
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