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After the extraordinary events of 2020, one would expect Colin McLean to be a bit cautious in his predictions for the New Year.
However, the founder and Chief Investment Officer of SVM Asset Management does not refuse to assess what is to come in the next 12 months.
With the latest restrictions in mind, vaccine rollouts “will trigger a strong global recovery later this year,” he says.
Colin McLean, Founder and Chief Investment Officer of SVM Asset Management
‘There is a pent-up demand from consumers and a great deal of savings that are currently available. Government incentives are likely to continue until the recovery is secured, ”he continues.
Inventory replenishment is helping to reverse the trend as inventories are currently low and the weaker dollar is helping to boost emerging markets. Asia is already benefiting from China’s strong recovery, while Japan should be offset by further stimulus.
All of this will be accompanied by a “small spike” in inflation later in the year, although high unemployment will curb “spiraling prices,” says McLean.
“Many international investors have less exposure to the UK and there have also been lower allocations from UK asset managers,” he explains.
“It has some attractive sectors, a dynamic economy, an open market for acquisitions, and the potential for some currency rebound.”
SVM, which McLean founded 30 years ago, manages five equity-based funds and an investment trust.
The group, whose slogan is “independent thinking”, enables its managers to pursue their own strategies and exchange ideas with the team.
The review is carried out by an independently chaired committee for fair value, liquidity, risk and compliance. The environmental, social and governance (ESG) assessment is an essential part of the SVM analysis.
“Particularly good governance,” says McLean, pointing out that sustainability was at the heart of the company’s philosophy from the start.
It started with UK funds Active and Global before SVM took off in 2006 when it recruited Dutch wealth manager Kempen’s socially responsible investment team, bringing in Neil Veitch, Hugh Cuthbert and Craig Jeruzal.
The group has subscribed to the United Nations-backed Principles of Responsible Investing and is given “a good annual rating for it”. She is about to submit to the Financial Reporting Council’s Stewardship Code.
“We exclude very little from investing, but we believe that more can be achieved by actively engaging with companies and will hold stocks as long as they progress in line with these discussions,” says McLean of how SVM applies this approach in practice.
The asset manager has investments like hydrogen fuel cell specialist Ceres Power
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