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How Tineke Frikkee has overhauled S&W UK Equity Income fund
by Elsa Buchanan on Feb 12, 2014 at 07:00
‘It could really ramp up to 4.5%… but I’m quite cautious and want to see what Lloyds will do with its yield in February. Growth will be on their side, particularly through the Help to Buy mortgage market.’
This, Frikkee says, could also spark a rerating.
The manager also describes the fund’s holding in Barclays as a higher beta play. She expects shareholders to be rewarded with a rerating on this bank holding as well.
On HSBC, which is Frikkee’s fourth largest holding at 2.6%, she anticipates 15% upside.
‘The bank is quite interesting because it will never be a high grower but profitability is improving.’
Pubs and buses
Frikkee favours travel and leisure stocks as beneficiaries of the UK recovery. She is allocating 11.1% to these types of companies and cites Easyjet as a good example of a ‘hugely’ cashflow generative company, paying both base and special dividends.
In leisure, Frikkee also holds Marston’s Brewery, which she added looks attractive as a result of a better diversified business mix.
She explained growth could come from the firm’s decision to serve food at the cheaper end of the scale.
‘Also, it is more Midlands-based, so I am quietly hoping the more depressed areas will hopefully start feeling a bit wealthier,’ she explained.
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- Rio Tinto PLC
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- Lloyds Banking Group PLC
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- easyJet plc
- Marston's PLC
- Go-Ahead Group PLC
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