The gap between the six fund managers in the Rehab Great Investment Race widened in May with sharp falls in telecom stocks inflicting wounds.
Hibernian Investment Managers is still leading the pack with its €100,000 worth €135,585 at the end of May. A disappointing month for Irish Life Investment Managers saw its investment fall below €100,000 to €98,586.
Hibernian gained its lead early in the race by investing heavily in technology stocks. Last month it switched much of those funds into its Target 20 fund, which includes 20 stocks in different sectors. It moved these funds back into cash towards the end of May, avoiding the volatility and losses that affected other fund managers.
Within the Target 20 fund, Hibernian did particularly well on stocks such as the Korean group Samsung, which rose 25 per cent over the three weeks. Other strong performers were the Irish-based pharmaceutical group Elan, which gained 14 per cent, and CRH with its shares climbing 5 per cent. Some 10 per cent of the Target 20 was invested in the US conglomerate General Electric, which improved over the month. Like other fund managers, it suffered where it had put money into the telecoms sector, with stocks such as Vodafone drifting lower. Hibernian took its gains towards the end of the month and converted the shares into cash. Investment manager Mr Dara Fitzgerald says it has now gone back into the market to buy equities with those funds. About 50 per cent has been invested in technology stocks with the remainder put into high yielding blue-chip stocks.
For Irish Life Investment Managers, May was disappointing. The bulk of its losses were due to a sharp fall in telecoms stocks such as Marconi, Alcatel and KPN. Alcatel shares lost about €3 with Marconi down by 20p sterling.
Investment manager Mr Seamus Magner said its performance had been disappointing and that it will be seeking to reduce the volatility of the stocks it is investing in. Like many of the other fund managers, it will be seeking to invest in defensive-type stocks in the coming month.
Pioneer Investment Managers also suffered a setback, recording a 0.9 of a percentage point loss over the month. It's €100,000 fund now stands at €109,063. Ms Anne Barker said its exposure to the European stock markets was the biggest factor that contributed to its weakness in May.
At the end of April it decided to take a more aggressive approach and in May moved more money into technology and telecoms stocks. Some 16 per cent of the funds were invested in its Global Technology fund, which dropped by 4.5 per cent. Less than 10 per cent was invested in telecom stocks, while a further 10 per cent was put into French equities. Ms Barker said it would be taking a slightly more cautious stance in June.
Bank of Ireland Asset Management achieved the best performance over the month, recording investment gains of 6.4 per cent. It is now in second position to Hibernian, with its fund valued at €120,354. The bulk of its funds have been invested in Independent News and Media. Mr Chris Reilly said it bought the stock at a relatively inexpensive price, earned a good dividend and has seen some strong growth in the share price. It is not intending to make any significant changes this month.
Setanta Asset Management is in third place with its fund worth €110,641 after a good performance from its World Equity Fund.
There is still another 10 months for the fund managers to manage their €100,000 investments for Rehab.
