It is time to brave and invest in UK smaller companies?
February 2009 was a scary time for investors. In the aftermath of the global financial crisis, the...
Luxury car maker Aston Martin is the latest in a long line of companies to announce an IPO this year. It intends to offer its shares for sale and become a public listed company.
Founded back in 1913, Aston Martin is known for its expensive grand touring cars and was made famous in the 1964 film Goldfinger, when James Bond drove its DB5.
Full of stunts, gadgets, fast cars and glamour, who doesn’t love a good Bond film? They are the ultimate thriller for a lot of people – and more exciting than we perhaps want our investments to be.
For a bit of fun, we looked at how some Elite Rated funds are ‘investing like 007’:
Held by Threadneedle UK Extended Alpha (4.4%*), Fidelity Global Dividend (4%*) and Liontrust Special Situations 4%**), Diageo is a global leader in beverage alcohol – including Ketel One, CIROC and Smirnoff brands of vodka, the mainstay of Bond’s favourite tipple, Martini. The Liontrust team like the company’s excellent international distribution network, which they say acts as a platform through which it can build and enhance brands of substantial value. And by investing in a number of ‘premium’ brand alcoholic beverages it has also developed significant pricing power – one of the key components of barriers to competition (and a building block of Liontrust’s investment process).
Schroder Income (4.3%*), Schroder Recovery (5.5%*) and new Elite Radar Schroder Global Recovery (4.2%*) all hold Anglo American, whichowns 85% of De Beers, the diamondcompany. The remaining 15% of De Beers is owned by the Government of the Republic of Botswana. Anglo American’s share price fell to £2.21 in January 2016 – its lowest level since the turn of the century described at the time as an ‘eye-wateringly cheap valuation’. Anyone brave enough to invest then has been rewarded. The share price today is £15.75***.
The largest holding (6.1%**) in Jupiter Asian Income is Sands China, an integrated resort developer and operator in Macau, and a subsidiary of Las Vegas Sands Corp, the owner of The Venetian Las Vegas and The Palazzo. Fund manager Jason Pidcock believes that Asian businesses which stand to benefit from structural demand growth are those operating in the travel, tourism and entertainment as ‘experiences’ now compete with ‘products’ for consumer expenditure.
Abingdon-based Thruvision is a holding in Marlborough UK Micro-Cap Growth fund (0.18%)**** and Marlborough Special Situations (0.12%)****. A defense technology specialist, the company addresses one of today’s important security challenges; detecting concealed weapons and contraband hidden under peoples’ clothing. It provides infrared body scanners used at airports, stations, shops and warehouses and its portable scanner product continues to grow.
With lots of travel and ‘non-standard activities’, luggage that includes high-tech gadgets and designer suits, questionable driving and general damage and destruction that is left in his wake, a less glamorous, but very necessary Bond investment would be insurance! Polar Capital Global Insurance fund could tick a lot of boxes here. Its top holding is Arch Capital (8.5%*), a Bermuda-based company which writes insurance, reinsurance and mortgage insurance on a worldwide basis. It has a focus on specialty lines: the segment of the insurance industry where the more difficult and unusual risks are written. Even Arch Capital may baulk at insuring 007 though.
*Source: fund fact sheets as at 31 August 2018
**Source: fund fact sheets as at 31 July 2018
***As at 18 September 2018
****Source: fund commentary September 2018