BIAM takes lead in Rehab Investment Race after a challenging second month

Markets struggled to make headway amid uncertainty over oil and the wider economic picture in July, leaving the seven Rehab players facing a real challenge in the second month of the investment race.

In the end, the July result was a respectable one, with the overall Rehab fund ahead by 2.2 per cent as the month closed.

The biggest winner last month was Bank of Ireland Asset Management (BIAM), where fund manager Mr Chris Reilly demonstrated the credentials that left him on top at the end of last year's race.

Mr Reilly was faithful to his one-stock strategy in July, with his fully invested holding in CRH generating a 7.6 per cent return over the month and propelling him from sixth to first place.

He said he still sees CRH - with its low valuation, sound balance sheet and diversified business - as an attractive investment. A possible increase in the firm's dividend is also a draw, according to Mr Reilly.

Second place at the end of July went to Hibernian Investment Managers (HIM), where fund manager Mr Lenny McLoughlin took a punt on Hong Kong-based diversified trading company Jardine Matheson.

Mr McLoughlin added the stock to his portfolio because of its exposure to a broad range of sectors - from fast food to financial services - and was trading on a cheap multiple.

Next up in July was Montgomery Oppenheim, the race leader at the end of June. This month's move down in the rankings came as fund manager Mr Richard Dunn sold off investments in Fyffes, CRH and Elan and bought into Swiss pharmaceutical firm Novartis. Mr Dunn held Novartis as the month ended but his primary pick was cash, with €77,785 on deposit.

AIB Investment Managers shifted down from second to fourth position in July with a monthly decline of 0.1 per cent in its portfolio. Fund manager Mr Lance Graham, who was still sitting on a 3.7 per cent overall gain at July 31st, did not trade in July.

His best performer over the month was Californian manufacturer of memory for digital cameras Sandisk, which gained 24 per cent in one day after posting good results.

Taking fifth place at the end of July was June's third-placed player, Setanta Asset Management. Fund manager Mr James McSweeney took a little profit in DCC and CRH, and also gained on Microsoft. Other trades in Axa and Nokia were less helpful however, with Setanta posting a negative return of 1 per cent for July as a whole.

Mr McSweeney began August with no cash, having taken positions in Swiss watchmaker Swatch and Swedish insurer Skandia with an eye to a market recovery.

Irish Life Investment Managers moved from seventh to sixth position in July with a negative monthly return of 2.4 per cent. Fund manager Mr Séamus Magner sold out of holdings in semi-conductor stocks, among others, over the month, with market volatility prompting him to translate his entire allocation into cash at the start of August.

Holding the bottom of the table as the month turned was Standard Life, last month's fourth-placed player. Fund manager Mr Tony Hood sat tight, with his main holding in Marks & Spencer generating a negative return of 2.7 per cent in July.

Mr Hood said he was not concerned about short-term fluctuations. He was awaiting details of M&S plans to return £2.3 billion (€3.4 billion) to shareholders under a tender offer, which was expected to drive the stock higher.

Those details were published yesterday afternoon. The stock closed down 1 per cent.