Citywire AAA-rated Timothée Malphettes has sold out of wind turbine giant Vestas in the wake of Donald Trump pulling the United States from the COP21 climate change agreement.
‘We had originally invested in Vestas after Trump was elected as we were looking at growth stocks trading at value and Vestas dropped from DKK 550 to DKK 400, so we bought in,’ he said.
‘But, the reality is they have 40% of their revenues from the US. With the US clearer putting down a market with regards to green energy and climate change, we thought it made sense to sell the stock.’
The position had been around 1.9% in before it was sold in May. Laval added that the pair managed to sell the stock at DKK 600, which meant it was a positive contributor for the month.
‘We thought it was time to take profit and we are not saying we won’t re-invest at some stage but the investors’ perceptions have changed considerably. We are active managers and bottom-up stock pickers but we took the opportunity to respond when needed.’
The fund runs with 58 stock positions and is split evenly between large-cap, mega-cap and mid-cap stocks. Recent additions over the past six months include consumer giants Nestlé and Unilever.
Malphettes said: ‘We bought into these towards the end of last year at a time when they were very much out of fashion and the multiples dropped. This was because these stocks – so-called ‘bond proxies’ – were expected to struggle as rates rose but we have seen attractive reasons to buy.’
The pair pointed to the new CEO appointment at Nestlé and potential to strengthen in areas such as medical nutrition, while Unilever has announced plans to pursue M&A and buybacks.
The Delubac Pricing Power fund returned 33.97% on a three year basis to the end of May 2017 in euro terms, which compares to a 24% rise by the FTSE World Europe TR EUR, its Citywire-assigned benchmark, over the same timeframe.