Richard Ivers
Conditions remain ideal for active equities management as the economy changes, according to a table-topping equities manager, who says ‘choppy’ conditions and increased corporate activity is creating good buying opportunities.
Richard Ivers, portfolio manager of the Prime Value Emerging Opportunities Fund, part of boutique investment house Prime Value Asset Management, says there are wide variations among stocks perceived as COVID ‘winners’ and ‘losers’. “We are seeing some quality companies flying under the radar as the economy changes, while the market is see-sawing about who the next winners and losers will be.
“For example, there has been a stampede into travel stocks, which are now valued higher than they were pre-COVID. At the same time there are good businesses which are priced lower than they were pre-COVID.
“There are good companies going cheap in the small caps space and we expect the buying opportunities to continue.”
He said other factors influencing small cap stocks include an increase in takeover activity, and a stronger US dollar recently. “Takeovers look like a trend which will continue to benefit small cap stocks for some time.
“Companies with US dollar exposure are starting to run in small caps.”
Ivers’ Prime Value Emerging Opportunities Fund has performed strongly through the pandemic, delivering 63 per cent (after fees) to investors for year to 31 March 2021. The Fund topped Morningstar’s table for funds which blend growth and value styles.
He said the challenge for all active managers currently is attempting to ‘look through’ and pick winners across a changing economy. “We’re looking at the winners from last year, such as companies in furnishing and online retail, who benefited from the lockdowns, and asking can they be winners again this year?
“Investors need to look through the swings. A tricky part is evaluating whether a trend is a permanent shift, or a short-term response to the pandemic economy.”
The Prime Value Emerging Opportunities Fund is currently open to retail investors.
Boutique manager Prime Value Asset Management was founded in 1998 and is part of an investment group including Shakespeare Property Group, managing equities, income securities, direct property and alternative investments.