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Funds Portfolio Trades - One position was reduced to 5.0%, and a new holding bought.

BlackRock Energy & Resources Income Trust: (BERI.L, FTSE Small Cap, Market Cap £138m, 110.5p, 5.0% of Funds’ Portfolio (target 5.0%)


BlackRock Energy & Resources Income closed at a 12-month low yesterday. This morning, I reduced the position to my new target weight of 5.0 per cent. I sold 4137 shares at 107.555p.

With the proceeds of the reduction in BlackRock Energy & Resources Income, I have introduced a position in JP Morgan American Investment Trust. I bought 510 shares at 866.8526p, leading to a 4.5 per cent position. My eventual target is 7.5 per cent.


JP Morgan American Investment Trust (JAM.L, FTSE Mid 250, Market Capitalisation: £1.6bn, 867p, 4.5% of Funds’ Portfolio, 7.5% target weight).  



In my December review, I pondered: “whether I had been guilty of focusing too much on macro factors and not enough on bottom-up stock picking. The conclusion must be yes. My exposure to commodity stocks, although helpful in 2022, was hugely detrimental in 2023. I had too much exposure to this theme. I allowed my belief in the positive drivers to influence my portfolio construction. I was also too obstinate to change course – perhaps because I had invested too much emotional capital in such a significant exposure. I intend to shift the balance back towards bottom-up stock picking.”


I hinted at a return to a more pragmatic approach. For my Portfolio to perform, I must not bury my head in the sand. I need to be invested in stocks/funds hitting new highs, not lows.


More information can be found HERE

One area where I have had too little exposure over the last few years has been North America. Increasing my exposure now always runs the risk that I am shutting the stable door after the horse has bolted. However, building a case for why the US may perform again in 2024 is not too difficult.


·      The US economy seems to be ticking along nicely – if it falters, there is scope for faster rate cuts.

·      As John Authers points out in his column this morning, the economy's strength supports the case for a slower pace of rate cuts in the US. Slower rate cuts might mean a stronger $ - it is certainly what we are currently seeing.

·      The size of the Magnificent Seven leads to a view that they cannot repeat 2023’s performance. I agree that one is likely to see a broadening of the market. However, the seven have got off to a good start in 2024. Nvidia has performed best, up 15.3 per cent this year.



The JP Morgan Trust has a long record of good performance, outperforming the S&P 500 regularly.


I know both the managers from my fourteen years at Flemings. They are very experienced.  


I like the approach with a good spread across sectors. I considered adding a technology trust but decided on this trust as it has proved capable of performing at times when technology trusts have not done so well. Over three years, this trust is up 51 per cent – Polar Capital Tech is up 14.5 per cent, and Allianz Technology is up 3.8 per cent. Over five years, the returns are similar.


I know performance is backward-looking and no guarantee of the future, but this team has proven successful over many years.


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