Forum Archive Index - September 2000

["Peter Maiden" <pmaiden@today.com.au>]

Derek - This is big sell down by Armstrong Jones but IMHO I feel it is more an 
exercise in reallocating their portfolios so the weightings are closer to what 
other funds are doing.

I don't think that their view on ITC would have changed too much. I would think 
that they fundamentally still think ITC has great potential.

However AJ needs to perform in line with their internal benchmarks (what 
indices they use I have no idea) and by being 'active fund managers' outperform 
other funds.

All funds have a portfolio that mirrors their index benchmark. Say in the case 
of a NZ sharemarket fund all would have 20-30% of TEL in them.

Getting out of sync with their index and other funds exposes them to being 
either big winners (or losers) compared to those other funds. I always find it 
ironic when they tell their customers that a 5% negative return is better than 
a 10% negative return. I have yet to find a fund manager who says they will 
manage funds with the specific purpose of making a x% return - irrespective of 
whether competitor funds are + or - that. 

Back to ITC and AJ - I think they realised that they were out of sync with 
other funds. Sell ITC and rebalnace their exposures to either being a lot 
better (or a lot worse) than other funds - not because they have lost 
confidence in ITC. Probably doing the same with any other tech related stocks 
they have in their portfolios.

Peter

Disc - have some ITC from esrly days in the bottom draw to cash in when their 
investments do. Know little about Armstrong Jones but active/passive managed 
fund managers are generally conservative. Isn't that why we do our own trading 
and investing?.  

 

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