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The funds betting big on a UK housing boom



JPM’s Georgina Brittain and Jon Ingram say that investors should still be looking for stocks exposed to the domestic property market.

By Daniel Lanyon, Reporter, FE Trustnet

Investors can continue to make money from the UK housing boom, according to JPM managers Jon Ingram and Georgina Brittain.

The housing market rapidly gained traction in 2013 with confidence returning to buyers, mortgage lenders and housebuilders.

Government policy designed to encourage more people to take on mortgages, such as the Help To Buy scheme and Funding for Lending, provided a huge boost to the housing market.

Some analysts and managers have voiced concerns the upturn may have run its course and that the market is ready to burst.

However, both of the JPM managers have overweight positions in housebuilding stocks and those heavily correlated to the UK housing market in their respective funds, and say that the surge in the stocks related to this development has further to run.

“While it is not without risk, the UK housebuilding sector continues to be an area where we see opportunity,” said Ingram.

“There was significant volatility in the share prices of housebuilders following the withdrawal of the Funding for Lending scheme.”

“The number of housing transactions forecast for 2014 are well below peak years and we’re still happy with the housebuilders and are maintaining our overweight, including names such as Barratt Developments and Crest Nicholson.”

“We also continue to own Foxtons and Countrywide, which are beneficiaries of the housing upturn, as well as Lloyds.”

Ingram co-manages the £147.5m
JPM UK Dynamic fund alongside John Baker and Blake Crawford, while Brittain co-manages the £170m JP Morgan Mid Cap trust alongside William Meadon.

Brittain’s JP Morgan Mid Cap trust has had a stellar three years. According to FE Analytics, it has returned 108.38 per cent over this time compared with 61.7 per cent from the FTSE 250 index and 45.03 per cent from its IT UK All Companies sector.

Performance of fund vs sector and benchmark over 3yrs


Source: FE Analytics

Of its top-10 holdings, four are directly affected by the housing market. These are Barratt Developments, Taylor Wimpey, Howden Joinery and Rightmove.

All of the stocks have significantly outperformed the FTSE All Share over the past year, which made 8.01 per cent.

Barratt Developments returned a massive 77.61 per cent and Howden Joinery made 73.28 per cent.


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