JPMorgan fund likes selected drugmakers, banks
LONDON (Reuters) - JPMorgan Overseas Investment Trust has scooped up selected drugmakers on the cheap as other investors dumped the defensive stocks and chased oversold cyclicals.
Investors have been shifting out of drugmakers and other defensive stocks into cyclical plays this year, driving up the MSCI All-Country World Index .MIWD00000PUS 41 percent since March 9, as the pace of economic deterioration moderated.
Jeroen Huysinga, manager of the 147 million pound fund, said he had bought Abbot Laboratories Inc (ABT.N) and Roche (ROG.VX) as they "are very, very interesting, reasonably high growth companies but have become extremely cheap."
He did not like AstraZeneca (AZN.L) and GlaxoSmithKline (GSK.L), however, as they were not set to deliver the kind of growth rate he was looking for.
Huysinga, who took over the fund on October 1, 2008, said the financial crisis, especially the immediate period after the collapse of Lehman Brothers last September, had created ample opportunities for stock pickers like him.
"Q4 (of 2008) was a good time to respond because everyone was panicking. All these hedge funds were blowing up, forced selling. It was (a) wonderful, wonderful opportunity. A moment like that was quite good," the 44-year-old fund manager said.
The fund, which holds about 80 stocks, handed investors a 10.4 percent return for the year to June 16. That compares with a 7.2 percent gain for the MSCI All-Country World Index during the same period.
OUSTANDINGLY CHEAP
Huysinga also said he liked Morgan Stanley (MS.N) and Goldman Sachs (GS.N) among the capital market banks, which have seen strong gains.
"At the end of Q4, Morgan Stanley at $12 looked outstandingly cheap. People thought they were going to go bust but we did not," Huysinga said.
Morgan Stanley closed at $27.48 on Wednesday, while Goldman Sachs was at $139.73.
"These are survivors. The industry has been consolidated, pricing power is stronger, activity levels have picked up sharply," he said.
Bailed out U.S. insurer American International Group (AIG.N) has chosen Deutsche Bank (DBKGn.DE) and Morgan Stanley as its joint global coordinators for a more than $4 billion IPO of its Asian life insurance unit, sources said on Thursday.
Also, European corporates, excluding financials, have issued 175 billion worth of euro-denominated bonds from the beginning of this year to early June.
Huysinga, who has 60 analysts in Tokyo, Singapore, London and New York to help him scrutinize 2,000 stocks around the globe, noted Chinese stocks also delivered strong returns.
Among his holdings were China Merchants Bank (3968.HK), China Construction Bank (0939.HK), Bank of China (3988.HK), China Shenhua Energy Co (1088.HK), tobacco and food flavoring producer Huabao International (0336.HK) and personal hygiene producer Hengan International Group (1044.HK).
Asked when he would cash in his Chinese holdings, Huysinga said: "These stocks are up 70, 80 percent, so you wouldn't expect me to hold on forever. It's not a buy-and-hold strategy."
The fund manager also liked U.S. railroad CSX (CSX.N), as the industry in the United States had strong pricing power.
(Editing by Simon Jessop)
