Alan Custis, head of UK equities at Lazard Asset Management, has rotated back into UK financials, in expectation the sector will continue to outperform in 2018 as interest rates and bond yields rise.
Custis (pictured), who manages the £178.46m Lazard UK Omega fund, had been sceptical of the sector in 2017, selling domestic-facing financials, including Provident Financial, and banks, such as Lloyds. Making up 25.5% of the fund as of 28 February, financials represent the largest sector weighting of the Omega fund, growing from 24.4% at the start of 2018. However, the fund is now positioned to take advantage of trends beneficial to the sector and dissipating "regulatory headwinds", such as the end of PPI-related enforcement action. Custis said while financials have not performed ...
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