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Simon Edelsten: which stocks will the Covid-19 crisis affect?
The managers of investment trust Mid Wynd have not been slow in reacting to the economic turmoil resulting from the coronavirus pandemic.
In recent weeks, the Artemis team that runs the £250million trust has been busy shifting the portfolio geographically towards the East, buying new stakes – or topping up existing ones – in both Japanese and Chinese companies.
In contrast, selective holdings in US companies have been disposed of.
The result is a global investment fund that's now far more defensive than it was a month ago.
It looks like the Democrats may sweep the Senate as well as the White House. Wall Street prefers a Republican president and certainly a Republican Senate. So with more than half of my global equity portfolios invested in American companies, should I be worried?
Listen to some Democrats and you might think that the banks and big pharma are doomed. Banks have been demonised and pharmaceutical companies are facing enormous pressure to drop drug prices.
On the back of this, bank stocks have been badly beaten up.
As for pharma – Obama had two terms in office and made little progress. Government can negotiate but it cannot dictate drug prices. That said, we have long recognised that with an ageing global population there is an imperative internationally to find ways to bring down the costs of healthcare.
That is why one of our investment themes (taking up around 10% of the fund) is not ‘healthcare’ but ‘healthcare costs’ – we skew towards companies that are finding cost-saving solutions. This includes companies like Becton Dickinson (BDX.N), which manufactures diagnostic equipment to enable speedier and cheaper diagnosis. This equipment can enable lower-cost early interventions.
We might also expect the Democrats to increase expenditure in certain areas – typically infrastructure. Biden has promised to spend $1.7tn making the US a 100% clean-energy economy with net-zero emissions by 2050. Our third biggest theme, after online services, is ‘low carbon world’ and our second biggest holding is Trane Technologies (TT.N).
It is one of our sustainability principles not to hold oil stocks, so we have little anxiety around the impact of a Biden presidency on the American oil industry.
Finally, in the wake of a Democrat clean sweep we might see more pressure on Amazon (AMZN.O), Apple (AAPL.O), Alphabet (GOOGL.O) and Facebook (FB.O), whose heads have been quizzed recently by an antitrust hearing in the US Congress.
The case against them is not as clear as some politicians might make out, but the combination of their high market power and low tax payments may prompt more action and drag on these stocks. We hold Amazon and Apple at just 2.3% and 1.9% of the portfolio respectively. We are alert to this regulatory risk and will be closely monitoring what happens next.
We have reduced exposure to the US by modestly taking profits in tech but if these stocks fall and continue to produce good results, we may buy back in. We have no problem with the investment case for most but think valuations have become stretched in some cases.
So much for preparing American stocks in the portfolio for a Biden presidency, the advantage of being a global investor is that we can move money elsewhere, too. With the money released from the US, we have increased our exposure to Japan, which now represents 14% of the portfolio.
Swanmore22 wrote:Tks Richfool for update .
I am a fan of Mr Edelsten.
And continue to add to Mid Wynd and also to Thermo Fisher
Swan
Artemis seeks ‘newer growth’ in air con after trimming tech
Artemis global equities manager Simon Edelsten is hunting for new areas of growth amid the pandemic after cutting back on high-flying 'FAANG' stocks.
Artemis’ Simon Edelsten believes the coronavirus pandemic has provided an inflection point for air conditioning (AC) companies, with a reassessment of our needs in daily life driving further demand on top of climate change.
It is one of the ‘newer growth’ areas that the co-manager of the £249m Artemis Global Select fund and Mid Wynd International (MWY), a £359m trust run along similar lines, is on the hunt for after trimming ‘FAANG’ stocks in the global strategies.
‘We’d kept an eye on air conditioning companies for a while inside of our “low carbon world” theme. More efficient, more fuel-efficient air conditioning has been a key subject, particularly in hot countries, for years,’ said Edelsten.
However, the pandemic has reinforced the need for cleaner and more regularly circulated air, especially in buildings like tower blocks.
This year, Mid Wynd’s shareholders have received a 12.8% return as Artemis Global Select has delivered 11.8% and the MSCI AC World index risen 7.2%.
Over three years, the trust has returned 47% and the fund 41%, outpacing the index’s 28% gain.
richfool wrote:Swanmore22 wrote:Tks Richfool for update .
I am a fan of Mr Edelsten.
And continue to add to Mid Wynd and also to Thermo Fisher
Swan
Yes, me too.
I just found this one, (dated 19th October), also on Citywire. It also includes some discussion of Amazon and Alphabet and ESG matters:Artemis seeks ‘newer growth’ in air con after trimming tech
Artemis global equities manager Simon Edelsten is hunting for new areas of growth amid the pandemic after cutting back on high-flying 'FAANG' stocks.
Artemis’ Simon Edelsten believes the coronavirus pandemic has provided an inflection point for air conditioning (AC) companies, with a reassessment of our needs in daily life driving further demand on top of climate change.
It is one of the ‘newer growth’ areas that the co-manager of the £249m Artemis Global Select fund and Mid Wynd International (MWY), a £359m trust run along similar lines, is on the hunt for after trimming ‘FAANG’ stocks in the global strategies.
‘We’d kept an eye on air conditioning companies for a while inside of our “low carbon world” theme. More efficient, more fuel-efficient air conditioning has been a key subject, particularly in hot countries, for years,’ said Edelsten.
However, the pandemic has reinforced the need for cleaner and more regularly circulated air, especially in buildings like tower blocks.
This year, Mid Wynd’s shareholders have received a 12.8% return as Artemis Global Select has delivered 11.8% and the MSCI AC World index risen 7.2%.
Over three years, the trust has returned 47% and the fund 41%, outpacing the index’s 28% gain.
https://citywire.co.uk/wealth-manager/n ... h/a1414767
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