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Independent IT halves massive cash war chest in three months
by Robert St George on Sep 11, 2013 at 08:47
The £160 million Independent Investment Trust has dug into its considerable cash reserves, worth 19% of the fund, to finance a summer spending spree.
Between May and August the trust cut its allocation to cash in half, from £31 million to £15 million.
The fund, managed by former Baillie Gifford UK equity head Maxwell Ward, used the money to increase its stake in two existing holdings and initiate positions in four more.
The two companies to which Ward has added are FTSE mid-caps Amlin and Ashtead. The former is a high-yielding insurer, whose share price has fallen by 3.5% over the past year as intense competition in catastrophe reinsurance has weighed on profits, leaving it on a modest price-to-earnings ratio of 7.6.
Equipment-hire group Ashtead, in contrast, has surged through the past year thanks to strong demand for its services in the US: its shares have doubled since last September.
As a result of the top-up, both Amlin and Ashtead have now entered the fund’s top 10 holdings.
The moves into John Laing and newly listed insurer Partnership Assurance Group have been the most substantial, worth approximately £3.5 million each. The footholds in Philip Morris and British Land are valued at just over and just under, respectively, £2 million.
Independent has been a top-decile performer so far this year, with a total return of 23.5% compared with an average of 15.2% from its peers in the AIC's Global Growth sector. Its long-term performance has been more erratic: top quartile over three years, second over one and five years, and bottom quartile on a 10-year view.
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