Why successful UK equity managers should have global focus

Tim Steer, manager of the New Star UK Alpha Fund, comments on Bradford & Bingley and why successful UK equity managers should have a global focus: "Some well known market commentators may have been telling us that the worst of the credit crunch is over and things are looking up for financials, but this does not apply to all financial stocks. Banks look cheap but they aren't really. The Bradford & Bingley news on Monday is an example in point, here's a business that's suffering not because of sub-prime fallout but because trading is poor in the UK. This helps to illustrate the point that a little scrutiny can go a long way in the current market conditions. The FTSE All Share is down around 7% so far this year, whilst the FTSE 100 has fallen by around 1% in the last year; not a great deal in other words. A bit of investigation, however, reveals that whilst a few companies have had a fantastic year the majority - retailers, banks, property stocks and house-builders - have not. The few are propping up the many. In such market conditions good stock picking will make a difference, although a good stock picker should have spotted this coming some time ago and now it's arguably too late to make amends, at least in the short-term."

"Last year I positioned the New Star UK Alpha Fund as a global fund. Just 36% of the companies activities in the fund are UK focused, the balance is overseas. With 64% of the fund focused on global growth I have avoided banks completely and focused instead on defence, Asia and those companies with big order books. A UK fund does not have to be UK focused. Investors in an actively managed UK equities fund should expect their managers to benefit from global growth and deliver value even when markets are tough."