Fund Management
Neptune Looks To Regional Banks, Home Builders Under Obama
Neptune, the UK based investment boutique, has a bullish outlook on US regional banking and homebuilder opportunities under the forthcoming administration of US president-elect, Barack Obama, says head of US Opportunities fund, Felix Wintle.
“Even in a crisis, surprising areas of the US market keep working. Both regional banks and homebuilders have outperformed,” Mr Wintle said, speaking at a briefing on how the incoming president will affect investors. The fund's main target is to beat the S&P 500 index.
“Regional banking in the US is the old-school and transparent part of the sector. Managers know their customers and are less likely to take risks. With homebuilders, we see companies that factored in preparation for economic downturn well in advance of the crisis, so this area should recover faster,” Mr Wintle said.
Mr Wintle said Neptune will also watch environment-related investment opportunities under the new US government, which is expected to be more favourably disposed towards "green" issues. Biotechnology is already a major investment area for the fund.
Mr Wintle said he plans to work closely with the boutique’s Green Planet fund manager, Chris Taylor in this area.
Mr Wintle and Neptune economist James Dowey said it is too early to make portfolio changes based on the president-elect’s plans. But they said it would be best to exercise caution with health insurance and pharmaceuticals.
President-elect Obama has pledged to cut pharmaceutical prices and roll out free health insurance for all. If he acts on these plans, the administration may be at loggerheads with this sector for quite some time, Mr Dowey noted.
Mr Dowey also advised caution on labour-using companies, pending the passing of the Employee Free Choice Act. This bill, which President-elect Obama co-sponsored, removes the right of trade unionists to vote in secret, meaning the unions will grow stronger and wage costs will rise.
Neptune’s US Opportunities fund was launched at the end of 2002. It has a large and mid cap focus and is worth £65.7 million, as of 31 October 2008.
