F&C's Paul Niven shakes up portfolio ahead of 'uncertain' H2

investmentweek.co.uk:

Paul Niven (pictured) is the fund manager of the F&C Investment Trust.

In its half-year report for the six months to the end of June 2023, the £4.5bn trust posted a net asset value total return of 4.7%, while the FTSE All-World index gained 7.5% over the period. 

FCIT's share price total return fell by 2.6% as the discount widened from 3% to 9.8% in the period, close to the widest it has been over the last five years.

Manager Paul Niven said stock selection had been a detractor from performance, as was the allocation to private equity. The relative performance of the listed strategies was negatively affected by the underweight positions held in several of the names which had driven the rally in Q1. 

The portfolio is currently split North America 38%, Europe 13%, Japan 5%, emerging markets 7%, global strategies 26% and private equity 12%. 

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Niven singled out Nvidia as a key performance driver during the period, up 175.5% after there was a surge in demand for its microchips, driven by a wider AI rally in the market.

The trust's private equity holdings accounted for around 1.5% of the underperformance against the index, which was partially offset by strong returns from the trust's European and Japan allocations. 

While many of the strongest performers came from US technology stocks in the period, Niven said the trust had divested from its US growth manager T Rowe Price in Q1 and allocated the proceeds to JP Morgan Asset Management. 

Meanwhile, the US Value portfolio run by Barrow Hanley posted disappointing returns due to a lack of exposure to Meta, which formed part of the value index, and poor performance from discount retailer Dollar General, which was down 34.2%.

Niven said