And, Pidcock admits, the timing of his gardening leave couldn’t really have been better.
“I resigned on 11 May which was pretty much the top of the market and I have spent much of my time on the sidelines watching the market fall. If nothing else we can’t be accused of launching a fund at the top,” he added.
Asked what the differences are going to be between his new fund and his previous one, the Newton Asian Income Fund, Pidcock told Portfolio Adviser, while there will be many similarities, there are three key differences.
The first difference will be on the yield discipline imposed on the fund.
“At 20% above that of the index, the new fund’s yield target is more flexible than the 35% demanded in the previous one. And, there is no single stock yield requirement,” Pidcock said.
Explaining that this change will allow him to invest in some lower yielding companies as long as the growth in dividends is expected to be above average, Pidcock said that it will benefit him particularly in markets like the Philippines where there are not that many high-yielding, liquid stocks.
The second key difference is an increased focus on larger, more-liquid stocks.
“Most of the companies that will be in the portfolio can be described as large-caps,” he said, adding: “Jupiter’s risk team has done an analysis of the model portfolio and are very comfortable that we have future proofed it, should it grow to a similar size as the last fund.”
The final significant difference will be a tighter range of holdings, between 40 and 50, rather than the roughly 70 the previous fund held.
Asked his view on the markets given the recent concerns around growth in Asia, and particularly in China, Pidcock said he remains optimistic.
While he says he does expect growth rates in China to decline, he feels that Asian markets have actually priced in a lot of the concerns.
