“[Mid-cap] has been hit particularly hard since the Brexit vote. There are some sectors, such as housebuilders, that have been hit particularly hard.” On the other hand, Round remains underweight mainstream banks, and the fund manager cannot see anything improving that outlook.
With regards to its international equities exposure, the fund holds stocks in a Chinese traditional medicine company and Round says it is very much a stock picking fund.
One of Round’s biggest lessons when managing money would be not to panic and to sometimes just “walk away” from the screen. “Sometimes you do need to not let the nerves get to you because you would be pushed into making moves that would be wrong. We don’t get it right all the time but often there is too much noise, too much short termism.”
She adds: “Brexit is a key event but no one is going to know exactly what will happen, certainly not in the first few days or weeks. If you’ve got a portfolio that is focused on what you know people want: they want food, they want shelter, healthcare, then you are ok. People want those things. And we still need to have strong companies in the environmental area, because that regulation is not going to go away.”
For example, Round explains how supply and demand for water is a huge issue today. While shortages are not a major issue in the UK yet, for the US and parts of Africa it will be in a real problem and that is not going to change, noted Round.
In anticipating this problem, the fund has invested in a high-risk technology company that makes a washing machine that does not use water (it uses little pellets instead).
“It’s very environmentally friendly, but it’s not going to be used by individuals yet. It is being used by hotels and hospitals, in the US it’s moving forward quite quickly,” she says.
“Those are the sort of companies that while they are a bit riskier, there’s a definite need for that sort of business and it’s quite exciting when they grow their business and get new contracts and become more mainstream, like Dyson.”
