Citywire A-rated Roberto Magnatantini has substantially increased his holdings in banks as he believes political risk in Europe is receding.
Financials in the OYSTER World Opportunities fund rose to 14% over the past year, with banks making up 10% of the fund, having had no exposure one year ago.
'We have gone from almost zero exposure to banks and zero exposure in Europe to quite a substantial exposure we bought banks like ABN Amro, Credit Agricole and Intesa Sanpaolo because we think that the political risk was receding. It seems to be going in the right direction.
'We have some hints of some bottoming of activity in Europe, as the credit quality, the credit flow and credit creation seems to be improving.
'For years we had quite a negative view on the banking system of Europe, so we have been very sceptical about being attracted just by the valuations, which were seeming quite low.'
Magnatantini holds around 1.2% in Intesa Sanpaolo and 1.5% in Credit Agricole and ABN Amro.
Speaking before the second round of the French election, Magnatantini said the risk of far-right candidate Marine Le Pen winning was slim, and it was unlikely that political events would impact the financial sector.
'Brexit is now a given, while clearly the tone the rhetoric is hardening, but, at the same time, you would not expect to have such a soft rhetoric between May and Juncker at the start of the negotiations.
'I think it is relatively as expected, so we wouldn’t be expecting something extremely smooth. But I don't think that this can derail the recovery of the financial system.'
Away from financials, the largest sector holding in the fund is IT at 26.8%. Magnatantini recently added a small investment in Micro Focus, a UK-based software company which has acquired US technology firm Hewlett-Packard.
'It is quite an original story and it is quite a strange animal in the technological space because it is an industry where top line growth and conquering a new market is of paramount importance usually. Micro Focus has more a mentality of an asset manager in a way,' he said.
'They milk the existing assets and use the cash to buy diverse assets and they really run that as a private equity firm would do. It is quite a trend story in the technological space.'
Over three years to the end of April 2017, the OYSTER World Opportunities fund returned 40.37% in US dollar terms. This compares to a rise of 19.03% by its Citywire-assigned benchmark, the FTSE World TR EUR, over the same time frame.