BY NIGEL KENNETT, SENIOR FUND MANAGER
UK equities performed strongly in December, as the UK government came to an agreement with the European Union to progress to the next stage of Brexit negotiations. However, it was a relatively quiet month from a company newsflow perspective. As a result, we also saw limited activity within the portfolio. However, the main changes were centred around the consumer discretionary sector. The biggest of these was initiating a new position in Ladbrokes Coral. The company is currently being bid for by GVC – which we also hold – and we feel it is a compelling deal on all sides. We also exited our position Sky, which has performed strongly of late, recycling the proceeds into building up our position in JD Sports, which we believe is well-positioned in the athleisure space.
Elsewhere in the portfolio there was very little change, although we did trim our position in Ashtead, the international equipment rental company. The stock has been an excellent performer in recent years and we still believe value remains, but we remain cognisant that it is still quite a cyclical business. Looking forward, we believe certain areas of the market remain attractively valued as we move through 2018, despite the headline price-to-earnings ratio looking quite rich. We remain focused on strong structural growth themes that we believe can thrive regardless of the domestic UK economic outlook.
Past performance is not a guide to future performance. The value of investments may fall as well as rise and investors may not get back the amount invested. Income from investments may fluctuate.
The information contained in this document is provided for use by investment professionals and is not for onward distribution to, or to be relied upon by, retail investors. No guarantee, warranty or representation (express or implied) is given as to the document’s accuracy or completeness. The views expressed in this document are those of the fund manager at the time of publication and should not be taken as advice, a forecast or a recommendation to buy or sell securities. These views are subject to change at any time without notice. This document is issued for information only by Canada Life Investments. This document does not constitute a direct offer to anyone, or a solicitation by anyone, to subscribe for shares or buy units in fund(s). Subscription for shares and buying units in the fund(s) must only be made on the basis of the latest Prospectus and the Key Investor Information Document (KIID) available at www.canadalifeinvestments.com.
Canada Life Investments is the brand for investment management activities undertaken by Canada Life Asset Management Limited, Canada Life Limited and Canada Life European Real Estate Limited. Canada Life Asset Management Limited (no. 03846821), Canada Life Limited (no.00973271) and Canada Life European Real Estate Limited (no. 03846823) are all registered in England and the registered office for all three entities is Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Asset Management is authorised and regulated by the Financial Conduct Authority. Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
CLI01078 Expiry on 15 April 2018