by Phil Doel
24. June 2011 00:45
With the Fund I am aiming to deliver a strong and rising income with the potential for capital growth. This week the portfolio has seen activity in both areas.
Laird Group, which has been trading in a range of 130-140p with an attractive yield of around 4.8%, received a bid approach from Cooper Industries of the US at a level of 185p. This gave the Fund a nice boost against a difficult macro-backdrop. The Laird management immediately rejected the offer saying that it undervalued the company. We now wait with interest to see Cooper’s response.
The recent profits warning from Dutch telecoms group KPN sent a shiver through a number of European telecoms groups. This gave me the chance to top up on Vodafone, which I like for a number of reasons. We believe the benefits of the portfolio restructuring are starting to come through and the headwinds of European termination rate cuts are subsiding. In addition, we believe dividends from its holding in US mobile operator Verizon are about to start coming through again all of which is good news from an income perspective. It also has good defensive qualities in a difficult market.
This weekend sees the merging of the F&C UK Growth & Income Fund into my F&C UK Equity Income Fund. The portfolios of both Funds have been brought into line so this should be a smooth transition with dealing set to start again on Monday 27 June.
