Trading Updates 02/03/2021
Trading Update - 1 March 2021
We have recently purchased Barclays plc and Vesuvius plc for the Risk Managed Funds.
We have recently purchased a position in Barclays plc for the Risk Managed Funds. The bank is involved in retail and investment banking, and also has a significant credit card business. Activity at the investment bank has been relatively strong and this increased volume of business is likely to persist for some time. Retail and credit card activity is subdued, but will pick up as lockdowns are eased and profitability should increase meaningfully as a result. Rising government bond yields will also provide a tailwind to performance, as will the potential for COVID related provisions to be written back. Banks are ‘under-owned’ by investors and we believe this could change given low valuations and improving prospects.
Vesuvius plc has also been purchased for the Risk Managed Funds. The company provides consumable, mission critical, molten metal flow control products to the steel and foundry markets. The company is either number one, or number two, in each market it serves. Steel and foundry production is recovering following the cut backs seen during 2020, and the company’s margin is likely to surprise to the upside as volumes recover as the benefits of its restructuring program become evident. Its clients are, generally, short of inventory and are beginning to restock, so the snap back in volumes could also be quicker than expected.