AMP explores cheap UK exposure
An AMP retirement fund has made its first direct exposure to the UK as it feels the country is now among the cheapest in the world.
In a webcast detailing the fund’s positioning, Darren Beasley, portfolio manager on the AMP Capital Core Retirement fund, said this was the first time the $343 million fund had invested directly in the UK.
He said: “We have bought into the UK directly for the first time. After years of Brexit, the UK is the cheapest market in the world. It has the highest earnings growth globally, it did have a dip but it certainly has the highest rebounding earnings growth globally.
The FTSE 100 had returned 11% over one year to 13 April and 27% over five years compared to returns of 33% and 68% by the ASX 200 over the same timeframe.
“When you look at the large multi-national companies in the FTSE 100, it has around 60% cyclical exposure which is perfectly suited to participate in the ongoing earnings recovery,” he added.
Examples of cyclical UK-listed companies included luxury goods retailer Burberry, housebuilders Taylor Wimpey and Persimmon, broadcaster ITV and banks Lloyds and Barclays.
He also highlighted the UK was one of the best countries in the world when it came to the vaccine roll-out, having administered at least one dose to over 32 million people. This placed it behind second only to Israel.
The AMP Capital Core Retirement fund had lost 0.1% over one year to 28 February, according to FE Analytics, versus returns of 2.9% by the mixed asset-flexible sector within the Australian Core Strategies universe.
AUTHOR
Laura Dew
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
