In the back
60 / 61
The problem is that a range of
possibilities exist, with new
ones frequently appearing,
and the final outcome
remains dependent on
political expediency
TB Amati UK Smaller Companies’
David Stevenson names three UK
stocks whose structural drivers
should persist regardless of what
path Brexit takes
Growing
the distance
and instead necessitates a blend of
portfolio holdings which can cope
with every eventuality. Perhaps even
better is to include stocks which may
be uncorrelated to any Brexit-related
crisis. In the TB Amati UK Smaller
Companies fund, we have attempted
to achieve this blend through exposure
to companies whose medium-term
prospects are built on structural
growth drivers that should persist in
either overseas or domestic markets,
whatever the Brexit saga brings.
T
he uppermost theme for many
fund managers at the moment
is how their portfolios will
perform in whichever Brexit scenario
transpires. The problem is a range
of possibilities exist, with new ones
frequently appearing, and the final
outcome remains dependent on
political expediency. This rules out a
single-scenario investment approach
Spirent provides perfor-
mance testing solutions
for data centres, telecoms
networks, navigation satel-
lites and mobile handsets.
After developing systems
for 3G and 4G technolo-
gies, it is doing the same for
5G. The first 5G networks
should go live in 2019/2020,
with the US, South Korea,
FE TRUSTNET
Japan and China in the
vanguard. Cyber security
concerns surrounding 5G
equipment manufacturer
Huawei are an issue, but
Nokia and Ericsson could
take market share and
Spirent is a supplier to both.
Spirent’s prospects for the
next two years are tech-
nology rather than macro
driven, and it fits the bill as
an “uncorrelated” stock.
[ STOCKPICKER ]
OneSavings Bank (OSB)
is among our favourite
companies for domestic UK
exposure as it will benefit
from any set of circum-
stances that would see fears
of a “no deal” Brexit recede.
OSB is predominantly a
provider of mortgages to
professional landlords. This
is a specialist area of lend-
ing in which smaller players
have been taking market
share as the larger banks
have shied away from the
complexity associated with
new regulations when lend-
ing to this type of customer.
As a secured lender it is at
the lower end of the risk
spectrum. Much of its
funding comes from retail
deposits under the name
Kent Reliance.
Capital (a stock that we
also own), Manolete gener-
Manolete Partners is a
ally buys the cases outright
relative newcomer, hav-
from the administrator for
ing only floated on AIM
a nominal sum, with a deal
last December. The com-
to divide the profits in the
pany is a highly special-
event the case is success-
ised provider of litigation
ful. This allows Manolete
finance, trading only in the to stay in control of the
UK and providing finance
case, prevent costs from
only in cases relating to in- ballooning and choose
solvent companies. Unlike whether or not it wants to
the better-known Burford
settle.
trustnet.com