Hibernian says it was lucky. Others would say brave and some might even say foolhardy. The investment management group threw caution to the wind and put its entire #100,000 (£78,700) fund for the Rehab Great Investment Race into the telecoms and technology sector, the graveyard of many investors' hopes in recent times.
"We figured it was early days and, if it didn't work out, we had 11 months to claw our way back," says portfolio manager Mr Dara Fitzgerald.
But Hibernian's decision to put all of the money into its Global Technology Fund paid off handsomely and, after four weeks of dealing, Hibernian is leading the race with an impressive return of 31.7 per cent. Over the same period in April, the ISEQ index of Irish shares gained 5.5 per cent, the FTSE 100 was up 6.2 per cent, the Dow Jones gained nearly 10 per cent, while a bounce in the technology-heavy Nasdaq helped it to add nearly 19 per cent.
"We were tempted to switch quite a few times but we held our nerve," Mr Fitzgerald says. Towards the end of April, Hibernian finally took its profits and moved the money into another of its funds, the Target 20 Fund, which contains its top stock picks globally.
In the contest, six teams of fund managers are pitted against the market, and each other, for one year. The aim is to make as much money as possible, with all profits going to the Rehab Group.
According to Mercer, the official monitors of the race, Hibernian finished the month with #131,686. This was well ahead of its nearest rival, Irish Life Investment Managers, which turned its #100,000 starting fund into #121,429 over the first month, a gain of 21.4 per cent.
Telecoms and technology stocks also delivered for Irish Life's portfolio manager, Mr Seamus Magner. The most active trader of all over the four-week period, Mr Magner was in the market on an almost daily basis, buying and selling the likes of Nokia, Alcatel, Deutsche Telekom, Phillips and Marconi to notch up the gains.
Head of the trading desk at Irish Life, he plans to continue active dealing, snapping up opportunities as they present themselves.
A different approach was taken by Bank of Ireland Asset Management, which came third in the league table with a return of 13.1 per cent.
Fund manager Mr Chris Reilly opted for mid-sized stocks in the Irish market, which he believes offer good value. Anglo Irish Bank, Independent News & Media, McInerney Holdings and Waterford Wedgwood were the shares he invested in over the course of the month.
Concerned about currency risk, he is inclined to stay in euro-denominated shares and sees further value in the Irish market.
Pioneer Investment Management, Friends First and Setanta occupy the bottom half of the table after the first month, although all made money, delivering solid returns despite the uncertainties that continue to plague investment markets.
Pioneer chose to divide the money up across a broad range of its funds. While some of the money went into safe options, such as the European Bond Fund, 15 per cent went into the Global Technology Fund and 10 per cent into the Eastern Europe Equity Fund, the two top performers over the month.
Friends First put between 60 and 70 per cent of the money into unitised equity funds, keeping the rest in cash that it used to invest directly in shares such as Iona, Amgen and Fyffes.
"We are using the residual cash outside the funds to buy stocks directly to give us a kicker," portfolio manager Mr Gerry Mangan says.
Finally, Setanta invested its money in its flagship Focus 15 Fund of top international shares. Despite making a positive return, the firm may review its "mainstream" investment approach given that some of its rivals have been doing "more exotic things than they do for 99.9 per cent of their clients", according to Setanta's Mr Paul McCarville.
However, with 11 months to go, it's all still to play for.
jmosullivan@irish-times.ie
