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.
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.
| Lowland Investment top ten holdings | |
|---|---|
| Holding | % of assets |
| 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% |