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Jupiter's Darwall buoyed by US move towards free trade
by Matthew Goodburn on Mar 14, 2013 at 10:04
‘On average I make two or three significant mistakes every year and about one in 10 is sold because I got it wrong.'
Darwall does not tend to differentiate between large and mid-caps although he believes that ‘sometimes the largest companies can lose their focus.’
He admits that opportunities to invest in countries in peripheral Europe are still quite limited, although he shows his unconstrained approach by revealing that his best performing stock of last year was Spanish online ticketing group Amadeus.
Conscious of valuations
While he is keeping a watchful eye on the overall valuations of the 40 stocks in the £2 billion portfolio, Darwall is comfortable with every holding.
‘I’m very attuned to valuations but make sure I know so much about that company so that I can always make an informed view on valuations. We have examples of companies in the portfolio where the share price has gone up but they look cheaper than they did.’
One such example is the fund’s largest holding Novo Nordisk the diabetes specialist, which Darwall believes to be undervalued despite a strong run over the last three years.
He told Citywire Selection last month: ‘Novo Nordisk has always looked expensive but we see it as a "cheaper" stock now than a couple of years ago, even if the stock price has more than doubled since 2009.
‘The stock is now trading at 25x earnings but it was already trading at more than 30x when I bought it 12 years ago and has been above 15x for most of the past decade. In the meantime the share price has risen by approximately 600%.'
Over five years to the end of February, the fund has returned 72.9% compared to the FTSE World Europe ex UK TR GBP return of 18.3%.
Selection Watchlist Verdict: This fund sits on our substitute’s bench of around 20 funds that we are monitoring closely for potential inclusion in the full list. Darwall has an impressive track record with a low turnover approach. His focus is on quality stocks which he believes to have the best long term growth profiles despite a volatile backdrop.
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