O’Dwyer was previously chief investment officer at the firm, which he joined in 2001. Before that he was the head of European equity sales at NCB Stockbrokers.
Montgomery Oppenheim manages €1.7 billion of funds on behalf of clients, while Sal Oppenheim has close to €100 billion of assets under management. Montgomery Oppenheim manages €500m in global equities, with its Global Equity Fund making up about €25m of that.
Performance
“Over the past five years the fund has outperformed world equities indices by five percentage points per year,” said O’Dwyer, noting that the return from the fund has declined by an average of 2.6% a year over that period, against an average 7.7% decrease by the FTSE World Index.
Advertisement
For the year to the end of May, the Global Equity Fund delivered a return of 12.4%, compared with 10.8% for the FTSE World Index.
Buying and selling
On a geographical basis, the fund is overweight in European stocks, with eurozone shares making up about half of the portfolio. It is underweight in American issues, which account for about 17% of the fund, while Asian shares make up 15%.
Advertisement
“Our view is that the valuations of US equities are a little too high compared to European and Asian stocks,” said O’Dwyer.
Currently the fund favours shares in the energy, telecoms and basic materials sectors to consumer discretionary stocks, consumer staples and financials.
Over the past year the fund increased its holding in CRH, the Irish multinational building materials group. “We like the sector and we felt that CRH was relatively cheap,” he said.
Société Générale, the French banking giant, counts as another stock that the fund has increased its exposure to over the past 12 months, in the view that continental European banks stand to gain from any increase in consumer borrowing. Shares in Infineon, the German semiconductor manufacturer, were also bought recently, mainly on valuation grounds.
The fund has been cutting its exposure to consumer staple stocks, such as Nestlé and Unilever. “They are operating in an environment where commodity or input prices are high, while they have very little pricing power on the output side,” said O’Dwyer.
Advertisement
Outlook
“We have a hefty degree of caution towards US equities,” said O’Dwyer, adding that American shares look overvalued and the cycle of US interest rate rises should continue to dampen enthusiasm for stocks there.
O’Dwyer said Asian equities will increase in prominence in the medium term as economic growth in the region continues apace.
The global equity markets should offer 6%-6.5% real returns to investors over the medium term, he said.
Advertisement
Joe Brennan