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Plackett burned by shorts as quality punished in September

by Robert St George on Oct 11, 2013 at 07:51

Plackett burned by shorts as quality punished in September

Citywire AA-rated Richard Plackett and Mike Prentis' £225 million Throgmorton Trust lagged its benchmark in September as the market rewarded the low-quality stocks it had shorted.

Throgmorton’s net asset value rose by 2.3% in September, while its benchmark Numis plus AIM excluding Investment Companies index gained 3%.

Alongside a traditional long-only portfolio headed by Prentis, Plackett (pictured) uses contracts for difference to bet against companies he expects to falter. At the end of August, these were worth £27 million.

Throgmorton confirmed that it had lost money on these positions last month, which offset ‘modest’ profits from the long portfolio. ‘September was a month when a number of poorer quality stocks performed well, and we were short some of these,’ explained Plackett.

Over the longer term Throgmorton has been a star performer, though, returning 73% on a three-year view compared with 46% from its benchmark.

Prentis also revealed that he had participated in the Foxtons initial public offering, investing through both Throgmorton and his £436 million BlackRock Smaller Companies fund. He commented that he had been ‘impressed with its management and growth prospects’.

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