Merrion retains Rehab race lead

APRIL WAS a mixed month for the five participants in the Rehab Great Investment Race. The scheme, which sees five fund managers invest €100,000 on behalf of Rehab, is now in its sixth month, with the total value of the fund standing at €542,454, up from €537,848 at the end of March.

In general, the mixed performance reflected an uncertain month for markets. During April, Portugal became the third country to ask for financial assistance, while the European Central Bank’s decision to raise policy rates in early April did little to ease funding concerns. Continuing tensions in the Middle East and the implications for oil prices contributed to a bearish mood, though better than expected corporate earnings did stabilise markets, particularly towards the end of the month.

Of the five individual participants in the investment race, Merrion Investment Managers maintained its position at the top of the pack in April. The fund manager, which has consistently been the top performer since the race started, has posted a 31.93 per cent return to date. Having fallen back slightly in February and March, the fund steamed ahead last month, posting a return of 4.4 per cent in the month.

The holding, which is well diversified across Irish, British, European and US equities, bought and sold into Aer Lingus and Statoil during the month, while it held on to UK engineering stock the Weir Group and American bank JP Morgan Chase.

Irish Life Investment Managers was close behind with a return of 3.4 per cent, and remains second in terms of the overall race, with a strong return of 21 per cent to date.

The fund sold Danske Bank in April, netting a profit of 1.5 per cent, after the Danish bank completed a rights issue. The fund also made a 1 per cent profit on the sale of IT stock Amadeus, having bought it after a sell-off. Activity in medical products company Synthes, which was the subject of takeover speculation from Johnson Johnson during the month, generated a 0.5 per cent profit.

The Rehab investment team led by Frank O’Brien also put in a strong performance in April, with a return of 2.2 per cent. While it came third in terms of its April performance, it remains in fourth place overall, with a return of just 0.3 per cent to date. The fund, which holds a mixture of cash and large capitalisation equities, benefited from positive trends in exchange rates. It held Tesco, Halma, Unilever, Vivendi, CRH and Ericssons at the end of the month.

Kleinwort Benson Investors lost 1.7 per cent in April, leaving it in fourth place for the month but in third place overall, with the value of its fund standing at 107,408. Agri-company Syngenta was its top performer, up 21 per cent following positive results. However, meter technology stock Itron was down 11 per cent amid concerns over its future order book, despite posting good results. Other names such as Grafton group drifted lower by 5 per cent over the month, bringing the fund down.

AIB Investment Managers remained bottom of the table, losing 5.9 per cent during the month. The fund continued to suffer from its focus on Japanese equities, which continued to lose ground in the wake of the earthquake and tsunami earlier this year.