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What are these Wealth Managers giving up for lent?

What are these Wealth Managers giving up for lent?

Andrew Morgan, portfolio manager, Walker Cambria (pictured above)

What investments are you steering clear of during this lent period?

With a higher than expected inflationary outlook in the US, and a feeling that the Bank of England’s rate cut last August was premature, we would not be surprised if interest rates rise sooner – and more sharply – than many had previously anticipated.

As such, one of our key concerns remains the potential for a liquidity ‘crunch’ in fixed income markets. We are, therefore, maintaining a short duration position in corporate bonds, and are avoiding those with maturities exceeding about four years.

What investments will you be feasting on during this lent period?

‘Feasting’ is probably going a bit far, but we are beginning modestly to increase the value bias in our portfolios. A look at long-term comparisons between growth and value suggests value stocks are more out of favour today than at any point in pretty much the last half-century.

Certain areas of the market, such as basic resources, utilities and food retailers are all on P/E ratios markedly below average. With Trump’s inflationary policies, and stronger-than-expected economic growth at home, we believe the rally in growth stocks that we’ve seen over the last five years may be coming to an end, and the time for value stocks to close the gap may have arrived.

Are you giving up anything for lent on a personal level?

On a personal level, my standard answer to ‘what goes best with a cup of coffee?’ has usually been ‘another cup’. So that’s the one thing I’m aiming to cut out for lent. Or, being slightly more realistic, the one thing I’m at least going to try to reduce!   

Joel Dungate, investment analyst, Redmayne Bentley

What investments are you steering clear of during lent?

With French and Dutch elections imminent, I won’t be dabbling in any European stocks. Although there are signs of recovery in the region, with inflation also picking up, I think the political and economic set-up on the continent is very fragile. However, other recent political developments have provided a boost to markets, so I could yet miss out!

What investments will you be feasting on during this lent period?

I’ll be feasting on the sweet goodness of Hotel Chocolat. Recent interim pre-tax profit is up 28%. The group is recording strong sales growth across all of its platforms. Shares are up over 80% since its flotation in May last year.

I’m a contrarian too. While many people give up chocolate for lent, the management has strong plans in place to benefit from the key upcoming events of Mother’s Day and Easter and I am confident the group can reap the rewards.

Are you giving up anything for lent on a personal level?

Well I can hardly say chocolate can I? I am going to give up trying to time the market. Once bitten, twice shy. The last year in particular has been full of shocks.

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