Speaking to InvestorDaily, Columbia Threadneedle client portfolio manager for global equities, Andrew Harvie, said his firm has “not liked banks for a while” when it comes to equity income.
“A lot of the financial companies that are looking to cut dividends are banking corporations,” Mr Harvie said – adding that Columbia Threadneedle’s global equity income fund is being “selective” regarding the banks, with a position in JP Morgan initiated at the beginning of 2016.
JP Morgan is one of the “better banks” in the US that will be able to capitalise on rising interest rates, he said.
For the most part, Columbia Threadneedle is playing the financial sector via the wealth management industry, Mr Harvie said.
“We like the idea that if people have more wealth, they need financial planners to advise them what to do with it,” he said.
“We like UBS, because of the growth in the Asian market. In Australia, we like AMP, given that superannuation is a huge thing over here – and obviously they’re very well capitalised to take advantage of that,” Mr Harvie said.
Columbia Threadneedle’s equity income fund also has some exposure to alternative asset managers, which are benefiting from banks moving out of certain areas, he said.
“We have limited exposure to the banking stocks that are starting to suffer. On the energy and materials side of things, that’s been out of favour by us for a while [from a dividend point of view],” Mr Harvie said.
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