In the wake of the recent market fall, 35-year-old Swiss Guy de Blonay has begun positioning his New Star Global Financials fund more defensively, increasing its cash weighting from 3% to 10%, says The Sunday Times. And given his impressive track record of coming through sharp drops, he's probably better placed than others to weather the current storm. When the FTSE plummeted 25% in 2002, de Blonay's fund fell just 5.3%, beating all his competitors in the specialist sector for that year.
Based in the UK since he joined Jupiter Asset Management in 1995, de Blonay's New Star fund has returned 126% against 62% for the FTSE All Share over the past three years. He explained his predominately bottom-up approach to investing in The Times last year. "Superior absolute performance is sustainable in any market conditions, as long as you pick the right stocks," he said.
De Blonay sets out his top stock-picking tips in this week's Sunday Times: Look for companies that are not only in a strong competitive position, but also show good growth potential. Identify companies with focused management teams that have a 5%-10% stake in the business. Go for firms that look attractively priced compared to their peers. This can be done by comparing p/e ratios. You should invest in companies that are increasing cash returns to investors through share buybacks and dividend growth. Include defensive counter-cyclical stocks' in your portfolio. For example, in the current climate you should pick firms that will not be badly affected by interest rate rises, like general insurers.
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New Star Global Financials top ten holdings
Name of holding % of assets
New Star Asset Management Group 4.96
Orco Property Group 3.62
Man Group 3.61
Marfin Financial Holdings SA 3.59
Credit Suisse Group 3.48
BNP Paribas 3.40
Commerzbank AG 3.28
Societe De Le Tour Eiffel 2.88
Unicredito Iitaliano SPA 2.84
D.Carnegie & Co AB 2.62
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