Rehab investment teams see little action in June

JUNE WAS a sluggish month for the Rehab Investment Race, with none of the five teams in the charity investment race seeing their investments move by more than 1 or 2 per cent.

The fairly steady performance was in line with the overall market trend. Global equities lost just over 1 per cent during the month, as fiscal issues in the euro zone periphery deepened, driven by the escalating situation in Greece, while economic momentum moderated in both developed and emerging markets, dampening investor sentiment.

However, there was a sharp rebound towards the end of the month, after the Greek parliament voted through austerity measures.

In terms of the individual team performances in the investment race – a competition in which five Irish investment managers are given €100,000 to invest on behalf of Rehab – Merrion Investment Managers maintained its position at the top of the table.

The team was the best performer on a month-on-month basis, advancing 1.1 per cent on the month, thereby outperforming the market generally, and bringing its total return to date to 31.1 per cent.

The advance in June was mainly due to gains made from the fund’s exposure to chemical company Yara International, as well as UK telecommunications group Cable Wireless.

Kleinwort Benson Investors, though still in third place in the overall race, were second in terms of monthly performance, inching up 0.1 per cent in June.

During the month Kleinwort Benson sold Joyou but purchased Potash, one of the world’s largest integrated fertiliser products companies, which rose by more than 7 per cent after the purchase. A 5 per cent advance by Hong Kong-listed jewellery retailer Chow Sang Sang International also helped to boost the performance of the portfolio.

However, these gains were offset by falls in Irish Continental Group which fell by more than 10 per cent following its previous strong performance, while Itron, which manufactures metering devices for measuring water usage, fell by almost 7 per cent.

Irish Life Investment Managers maintained its position in second place overall in the Rehab race, with an impressive 23.4 per cent total return to date, though it slipped back 1.1 per cent during June.

During the month fund manager Seamus Magner sold Bank of Ireland at a profit, while Thomas Cook, Yara and Northumbrian Water holdings were also sold.

The portfolio head maintained its holding in Iseq-listed financial services company IFG, which is at the centre of a takeover bid, at the end of the month.

Rehab’s own investment team, led by Frank O’Brien, maintained its position in fourth place, slipping back 1.3 per cent during June.

Its overall return since the race began in November is 0.3 per cent, leaving the total value of its fund at €100,342.

The fund’s passive investment strategy paid off for most of the month, particularly in light of the euro zone uncertainties, though this led to the fund missing out on the rally towards the end of the month.

AIB Investment Managers once again found itself at the bottom of the table in June, though its small loss of 1.9 per cent meant it stabilised its position somewhat.

The fund, which concentrates on Japanese equities, has lost a quarter of its value since the investment race started, mainly due to the drastic underperformance of Japanese stocks since the earthquake earlier this year and the effect of currency exchange rates on the value of the portfolio.