Threadneedle UK Select beat the FTSE All-Share index over the first half of 2015 delivering a total return on net assets of 4.5% against 3% for the index. The discount narrowed slightly from 6.5% to 6.2%. The dividend was upped from 1.85p to 1.9p.
The investment manager says Crest Nicholson climbed after delivering an encouraging trading update; housebuilding stocks were also buoyed by the prospect of ongoing low interest rates and the Conservative Party’s election victory. Essentra outperformed after full-year profits beat expectations. The company, which produces speciality plastic and fibre products, said that it is well positioned for further profitable growth in 2015 and also released details of the acquisition of an Australian firm that it expects will enhance earnings. Packaging business DS Smith, which also contributed positively, continues to demonstrate an ability to grow faster than the market, even in a competitive and relatively low-margin sector. Not holding Glencore also contributed to outperformance, as the resource firm struggled with slowing demand in China and falling commodity prices.
In sector terms, consumer-discretionary and telecoms stocks were the best performers, all posting substantial gains. Sector allocation was beneficial for Threadneedle UK Select over the period, as the zero weighting in utilities stocks supported returns. Though an underweight position in financials weighed on returns, this was more than offset by the overweight in consumer-discretionary stocks.
UKT : Threadneedle UK Select outperforms rising UK market in H1