With the dollar hitting “new lows against currencies around the globe, America is becoming the world’s discount store”, reports Candace Jackson in The Wall Street Journal.
That’s been good news for US exporters, buoyed by global demand for everything from tractors to agricultural materials. And playing this theme has served investors in the Neptune US Opportunities Fund well this past year.
It’s returned 22.5% against a sector average of 5.4% over the past year, after Citywire AA-rated manager Felix Wintle decided to bail out of financials and housebuilders in autumn 2006 and sunk the money into sectors likely to benefit from a weak dollar.
Top of his list, agricultural stocks. “There has been an ongoing bull market in agricultural materials, such as fertiliser and potash,” he tells Citywire. “Arguably these stocks are sensitive to the US economy, but the US is the biggest exporter of corn and there is huge demand for yield-boosting materials.” Stakes in food producer Monsanto and potash supplier Potashcorp have been among the fund’s top performers this year.
He also likes biotech stocks, because of their defensive nature and the fact that US firms still lead the field. A contrarian who takes sizeable bets on his themes, it’s perhaps not a fund for everybody, but Juliet Schooling, head of research at Chelsea Financial Services, tells Citywire: “I would back him having met him and seen what he does… It’s been a reasonably tricky time, which is always a good testing ground”.
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Neptune US Opportunities Fund: sector breakdown
Health care, 19.4%
Consumer staples, 14.0%
Materials, 13.5%
Industrials, 13.2%
Consumer discretionary, 11.8%
Cash, 7.4%
Energy, 7.2%
Information technology, 6.5%
Utilities, 4.1%
Telecoms, 1.5%
TOTAL 98.6%