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Fidelity's Alex Wright: why Brewin Dolphin is a Budget winner

Fidelity's Alex Wright: why Brewin Dolphin is a Budget winner

Citywire AA-rated Alex Wright believes Brewin Dolphin is one of the stocks most likely to benefit from the Budget.

According to the Fidelity fund manager, the wealth firm is well placed to exploit from the overhaul of pensions by George Osborne, which saw the chancellor scrap the requirement to buy an annuity on retirement.  

'The Budget is [a] positive for wealth managers as it encourages saving and means pensioners will need more help managing their assets in retirement,' said Wright, manager of the Fidelity Special Situations and Special Values funds.

'We had been positive on the space as industry dynamics are improving thanks to consolidation and IFAs leaving the sector and regulation which pushed up fixed costs for the industry, giving a further advantage to larger wealth managers.'  

'A key position is Brewin Dolphin which also benefits from internal change as a new management team focus on cutting costs and raising margins closer to those of peers.'

A Bank of America Merrill Lynch analysis this week said the pension shake-up presented a big opportunity for wealth managers, given the government was setting aside £20 million to bridge the advice gap.

Wright also views Rank Group - which runs bingo halls under the Mecca brand - to be well-placed to prosper from the Budget, after Osborne said Bingo tax would be halved to 10%, bringing it in line with sports and online gambling.

'This will help offset the structural decline we have seen in UK bingo halls over the last few years and will result in a meaningful pick-up in earnings,' Wright said.  

'The company demonstrated its improved outlook for the space by announcing plans for three new bingo halls shortly after Osborne’s announcement.'

Meanwhile Citywire A-rated James Griffin, manager of the Fidelity MoneyBuilder Growth fund, cites Taylor Wimpey as a Budget winner.

He believes the housebuilder will profit from the decision to extend the 'Help to Buy' scheme to 2020, with government funding for the property market increasing from £3.5 billion to £6 billion and from 73,000 to 120,000 houses.  

'This announcement is a big positive for the UK housebuilders, as it materially reduces a key medium term concern for them, and takes away market fears that some of the government support may be withdrawn after elections,' Griffin explained.  

'Although [Taylor Wimpey] has performed well over the last 12 months or so, it has lagged its peers and trades on an attractive valuation of 1.5 times book value.

'It has a sensible strategy focussed on margin improvement over volume growth and continues to take advantage of attractive prices to strengthen its strategic land bank.'  

Wright was appointed lead manager on the Fidelity Special Situations fund at the start of this year. 

In the three years to 19 March the fund has returned 47.8% versus a 33.2% rise in the FTSE All Share.

He has also run the Fidelity UK Smaller Companies fund since February 2011, which has returned 103.5% over three years versus a 68.1% rise in the benchmark.

Griffin has returned 39.5% on his Moneybuilder Growth fund in the last three years versus a 33.2% rise in the FTSE All Share.      

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James Griffin
James Griffin
61/156 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 21.68%
Alex Wright
Alex Wright
28/180 in Equity - UK (All Companies) (Performance over 1 year) Average Total Return: 2.22%
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