Market turmoil isn't always bad news. While some shares may underperform, market dips can provide opportunities, says Laura Foll, co-manager of the Lowland Investment Company (LSE: LWI). "We've seen some quite good value emerge in some of the large-cap areas," she tells Investors Chronicle. "We've been adding a small amount to our holding in Glencore to our Legal & General position and just a small amount to Tesco."
Lowland has weathered the recent storm well: its net asset value (NAV) is down by 7.7% since April, compared to 12% for the FTSE All-Share. This outperformance is thanks to its mid-cap and small-cap holdings, rather than its blue chips, says Foll. Lowland's remit is to deliver a higher than-average return in terms of both capital and income growth by investing in UK companies.
Up to half the portfolio is in FTSE 100 stocks, while the balance is in smaller companies to provide growth. Many smaller firms, such as crash-barrier maker Hill & Smith (which has a market cap of around £0.5bn), are more exposed to the relatively buoyant UK economy than faltering markets such as China and so have enjoyed strong results.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Lowland is overweight in industrial and non-life assurance stocks: strong performers include aerospace engineers GKN and Senior, as well as insurer Hiscox. It recently increased its holding in National Grid, while Foll says media group Pearson looks interesting. The fund has returned 2.4% over one year, 55.3% over three years and 145.2% over five years, beating its benchmark, the FTSE All-Share. The annual charge is 0.5% and it is trading at a premium of 3.5% to NAV.
Contact: 0800-856 5656.
| Senior | 3.30% |
| Royal Dutch Shell | 2.60% |
| Hiscox | 2.60% |
| Phoenix Group | 2.30% |
| Provident Financial | 2.20% |
| Scapa Group | 2.10% |
| Hill & Smith | 2.00% |
| BP | 2.00% |
| Amlin | 1.90% |
| GKN | 1.80% |
-
Redundancy on the rise – how to manage a sudden drop in incomeUnemployment and redundancies are higher than a year ago, new figures show. We look at how to protect your finances if you face a sudden loss of income.
-
What is the ideal time to spend on the property market? How you could risk losing thousandsTime on the housing market matters – get an offer too quickly or too slowly and you’ll often find you have to settle for less than the asking price. What is the ideal time for a property to spend on the market?
