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Graham French: last summer was the worst of my career
by Matthew Goodburn on Mar 12, 2013 at 13:54
Ingredients firms such as Germany’s Symrise and US group IFF are also key holdings as French sees such groups as an effective proxy for global growth, wherever it comes from.
‘If you invest in these companies you don’t need to know if McDonalds or Burger King are the winners in China as Symrise and IFF dominate the global ingredients market.'
Conversely, a holding in Yum Brands was sold when it hit 45 times 2013 earnings.
‘We bought in at 20 times [2013 earnings]. It continued to go up after we sold as everyone saw it as an easy proxy for Indian and Chinese growth but now it is starting to lose its lustre as people in China are turning off brands like KFC.’
Recent additions to the fund have included distribution specialist UPS and ports operator DP World.
‘DP World was flat three years ago and had a poor balance sheet. We have had a very open dialogue with management and now it is at an all-time high. In the case of UPS, it doesn’t matter which emerging market does well, UPS will be a beneficiary of that growth wherever it is.’
Over five years to the end of February, the fund has posted 21.1% compared to the Customised Benchmark M&G Global Basic Composite return of 48.5%.
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