In focus
[ SECTOR PROFILE ]
42 / 43
Trust pick
The US
At the end of February, Mid Wynd
International had 56 per cent of
its portfolio invested in the US.
However manager Simon Edelsten
says this has now been cut to below
50 per cent as he fears the US was not
prepared for the crisis.
“Our view on the US is the one that
has changed the most,” he says.
“President Trump has stated the US
is not equipped for a shutdown, so we
have gone from hoping for a good year
to fearing the worst.
“Closing roads and rail is not the
US way, while its healthcare system
is highly fragmented, especially its
hospitals, with things controlled very
much on a state-by-state basis.”
Mid Wynd has a third of its assets in
tech, dominated by US companies.
“Many of these, such as Amazon, have
shown their importance to us in new
working conditions while others, such
as enterprise software companies, are
seeing little change to their growth
levels,” adds Edelsten.
CURRENT VALUATIONS VERSUS 15YR AVERAGES
CAPE Forward P/E Trailing P/E P/B Yield (%)
UK 12
(13) 10
(12) 11
(14) 1.4
(1.8) 6.2
(3.8)
US 24
(25) 15
(15) 18
(18) 2.9
(2.8) 2.3
(2.0)
Europe
ex UK 16
(16) 12
(13) 14
(16) 1.5
(1.8) 4.0
(3.2)
Japan 17
(24) 11
(14) 13
(16) 1.1
(1.3) 2.8
(1.9)
EM 10
(15) 10
(11) 13
(14) 1.4
(1.7) 3.2
(2.6)
Scottish
Mortgage
Adrian Lowcock, head
of personal investing at
Willis Owen, picks Scottish
Mortgage as his trust of
choice for access to the
US, even though it sits
in the IT Global sector.
“While some stocks in
every portfolio will suffer,
the disruptive technology
focus of this fund is
likely to have some big
winners such as Amazon
and Netflix,” he explains.
“The crisis is likely to
accelerate the transition to
technology and introduce
new audiences to it as
well.” Scottish Mortgage is
up 123.51 per cent over the
past five years compared
with gains of 42.61 per
cent from its sector. It is on
a discount of 1.09 per cent.
Source: Schroders. As at 31/03/2020. 15-year average (median) in brackets.
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