GRAHAM Campbell, chief executive of Scottish investment house Saracen Fund Managers, has revealed his Global Income & Growth fund has outperformed the All-Share Index in its first full six months, and declared that equities offer "very good value".
Meanwhile, he expressed hopes that additional inflows of investor money would increase the size of the Global Income & Growth fund from nearly £5 million to £10m by the end of this year, in what is a tough fundraising environment.
The fund is sold through wealth managers, such as Rathbone Brothers and Brewin Dolphin, to high net-worth individuals.
Declaring that "you have to buy when the market is out of favour", Mr Campbell added: "Institutional holdings of equities are at historically low levels. We think they are very good value."
He said that the fund, launched on June 7, had made a negative total return of 1.5% in the six months to the end of December. This was a better performance than the All-Share Index, which made a negative total return of about 3% in the same period.
Mr Campbell highlighted the fact that a large part of the portfolio was in big brand companies such as restaurant chain McDonald's, household products companies Procter & Gamble and Unilever, drinks giant Coca-Cola, and food groups Nestle, Kellogg's, and Heinz.
Highlighting such big-brand companies' track record of delivering earnings and dividend growth, and their relative resilience in tough economic conditions, he added: "These businesses – they are never the cheapest businesses in the market. These are just value-creating companies."
Mr Campbell, emphasising that the Global Income & Growth fund was almost fully invested in a 56-strong portfolio of com-panies and had only about 2% of its assets in cash, said: "People give us money to invest. We think the value is there. We are not trying to time the market."
He added: "I think it is the lowest-risk portfolio we have ever put together. This is not a portfolio we want to take risks on capital (with). We are not investing in businesses that are very volatile, or are very leveraged."
Mr Campbell highlighted drinks giants Diageo and Anheuser-Busch InBev, and Swedish engineering company Atlas Copco as stocks which had performed strongly within the Global Income & Growth fund.
He cited Tesco as a stock which had performed poorly, but he believes the UK supermarket giant will prove a good investment choice in the longer run.
Mr Campbell, who has overseen a move of the investment house's headquarters from Glasgow to Edinburgh, said: "We always assumed they would lose market share in the UK. We still think the growth story is intact."
He also noted that Saracen Global Income & Growth held stock in cruise giant Carnival Corp, which suffered a tumble in its share price in the wake of the Costa Concordia disaster.
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