Star manager Pidcock boosted by nuclear breakthrough
Australian energy firm Silex has already seen its share price soar, but the Newton manager believes the floodgates have yet to fully open.
By Joshua Ausden, News Editor, FE Trustnet
Thursday September 20, 2012
A "revolutionary" breakthrough in the uranium industry is set to provide a welcome boost to the £601m Newton Oriental
fund, according to manager Jason Pidcock (pictured)
, who has finally been rewarded for his patience with energy company Silex.
The Australian-domiciled stock – a 2.1 per cent holding in the portfolio – has today announced that its "top secret" enrichment programme has been given the green light to go mainstream. Shares have already jumped 7 per cent on the news, but Pidcock believes this is just the beginning.
"I’ve held this company for six years and have waited for this announcement since that day," he said.
"Silex has invented a way to enrich uranium through laser treatment, which today has been given the all-clear by the US Nuclear Regulatory Commission’s Atomic Safety and Licensing Board [ASLB] to be used commercially."
"This could see the company take on a big share of the uranium market, which is very exciting indeed."
As yet, the announcement has only been made internally, but is available on the Silex website. It is set to be officially announced next week, which Pidcock believes will set the share price rocketing even further.
"This is massive news, but news very few people are aware of," he added.
According to the statement by Silex, the first commercial laser uranium enrichment plant will be constructed in Wilmington, North Carolina.
The chief executive of Silex, Dr Michael Goldsworthy, said: "The ASLB's initial decision regarding [the] licence is an important milestone for the industry. This is a great day for Australian technology and we are very proud of our achievements."
Silex is Pidcock’s 18th-biggest holding in the Newton Oriental fund. Australasia is one of Pidcock’s most overweight regional positions, accounting for 23.2 per cent of assets under management (AUM).
Energy is also a key part of his portfolio: industrials, oil & gas and basic materials have a combined weighting of around 36 per cent, according to data from FE Analytics
Performance of fund vs sector since August 2004
Source: FE Analytics
The news has delivered a much-needed boost to the fund, which has had a difficult time of late. It has underperformed its sector over one year, with returns of 3.61 per cent compared with 6.83 per cent.
However, it has still outperformed over three- and five-year periods, and ever since Pidcock took over in August 2004.
The manager is better known for his £2.3bn Newton Asian Income
fund – one of the best-selling products of recent years and a top-decile performer in its Asia Pacific ex Japan sector over one, three and five years. It is currently yielding 4.5 per cent.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
"The income fund is more the tortoise than the hare,"
said. "It’s like Pac-Man, gobbling up the dividend and growing gradually as it does so."
"The growth fund [Newton Oriental] looks for catalysts to push the share price, so you have to be a little more patient."
When asked which one of the Newton Asian Income or Newton Oriental funds he thought was best suited to the current environment, Pidcock was tight-lipped.
"We’ve seen a short-term switch from income into growth in the last few weeks, on the back of monetary easing in the US and Japan," he commented.
"I’m not sure whether this switch will last for long, because I still think we are in the same environment and will continue to be for some time."
"I’m happy where the income fund is positioned, but it is the same story with the growth fund – it is not reliant on loose monetary easing to succeed."
Both Newton Asian Income and Newton Oriental have a minimum investment of £1,000 and a total expense ratio (TER) of 1.65 per cent.
Pidcock confirmed that the newly launched Newton Emerging Income portfolio
will be available from 8 October this year.