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Rathbones’ Stick backs Barclays for 'dividend bonanza'
by Danielle Levy on Aug 27, 2013 at 13:22
The fund’s holding in bookmaker William Hill, for example, posted a 53.5% rise between January and July alone. Although the ‘business risk’ associated with these positions remains at acceptable levels, Stick says the ‘price risk’ has grown.
With stocks such as Rio Tinto and Barclays, which make up a small part of the portfolio, he says that although he is taking on greater business risk, he believes the price he has paid provides a buffer.
‘I love buying high-quality businesses cheaply, but there are not many opportunities around right now so we have had to look in the ugly drawer,’ he said.
‘This is not me saying this is the best bank and investment I can find, but right now I am happy to take the risk because of the price I am paying.’
Although markets have proved robust, the A-rated manager remains cautious on macro headwinds – not least the US’s debt pile, a potential Chinese hard landing and the ongoing problems in the eurozone.
‘Markets have gone up, we have invested in decent businesses and we are happy with how they have performed, but we are not convinced that certain aspects of the global economy are priced into the market,’ he added.
Over the three years to the end of July, Stick has posted a 62.13% return with the Rathbone Income fund, outpacing the FTSE 350 Higher Yield’s 50.8% rise, according to Lipper. The fund has a historic distribution yield of 3.55%.
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by Alex Steger on Dec 11, 2013 at 10:19