Oppenheim shrugs off market turmoil to stay ahead of the pack

DESPITE THE turbulence evident in global stock markets last month, Oppenheim Investment Managers continued to display the Midas touch in the Rehab Great Investment Race, leaving the rest of the pack trailing in its wake.

Oppenheim, which has been acquired by Merrion Capital to boost the stockbroking firm's fund management arm, has been a consistently strong performer since the charity investment race kicked off last summer, deftly side-stepping the challenges presented by wildly volatile markets.

And last month was no exception. Fund manager Stephen Hynes maintained a strong green bias, dipping in and out of alternative energy stocks such as German solar cells manufacturer Q-Cells, and solar electric technology developer SunPower. By the end of the month Hynes had streamlined his portfolio down to just two stocks, carrying Suntech Power and XsunX over into March.

Oppenheim's race fund jumped 10.9 per cent in February, a month which saw the Iseq index slump 3.7 per cent.

At this point in the race, Oppenheim is propping up the losses incurred by the four other contestants. Its total return so far stands at 135.8 per cent, as its race fund has grown from the original investment of €100,000 to just under €235,800. This compares with a combined loss of more than €50,000 incurred by the other competitors.

Fortunately Oppenheim's profit more than eradicates this shortfall, and the overall profit - which at the end of the race will be used to help autistic children - now stands at roughly €83,000.

The only other Rehab competitor to defy market conditions and produce a positive result in February was KBC Asset Management, whose race fund grew by 2.4 per cent. Once again fund manager Noel O'Halloran stuck with his buy-and-hold strategy and didn't make any changes to his compact portfolio of five stocks - CRH, Smartrac, Acciona, Tele Norte Leste Participações and Cia de Saneamento Basico.

However, KBC's positive performance in February was not quite good enough to wipe out previous losses incurred, and its initial investment now stands at a slightly diminished €97,848.

In third position is Irish Life Investment Managers, which saw its existing losses compounded by a further 1.4 per cent fall last month, leaving its fund at a depleted €91,992. Séamus Magner, who is heading up the fund, continued to favour an active stockpicking approach, but failed to outwit the market.

Société Générale proved to be a double-edged sword for Irish Life. Magner realised a sizeable gain on the first day of the month when he sold off his holding in the ailing French bank, but unfortunately a quick trade on the bank later in the month wiped out a fair chunk of that gain. Other trades that went against Irish Life included Iberdrola, Nobel Biocare and Barclays. The only stock held over into March was Iona.

Overall Irish Life's race pot is now down 8 per cent, so it has a lot of ground to make up if it is to climb from its current mid-table position.

Bank of Ireland Asset Management also succumbed to difficult trading conditions last month, shedding a further 4.3 per cent from its fund. This brings the total loss sustained since the start of the race to 25.5 per cent, leaving its race fund at a considerably depleted €74,504.

Undeterred by the erosion of his race fund, fund manager Pat Cunningham held fast with just four stocks - infrastructure group MacQuarie; Sonic Healthcare, an Australian medical diagnostics company; Hong Kong property developer Sun Hung Kai; and French services company Vallourec.

AIB Investment Managers sustained the most severe hit of all contestants last month, with its fund plummeting by €11,835, or 12.5 per cent, over the course of the month to €82,904.

Once again there were no trades, as fund manager Keith Johnstone stuck with his four favourites - Nintendo, National Oilwell, Flir Systems and Crocs.

"The main reason for the decline in the fund in February was a 32 per cent decline in Crocs, the leisure footwear company," Johnstone said. "The stock market has become increasingly worried about contracting margins and high inventory levels at the company despite it posting strong sales." Movement in the other stocks was more modest, he noted. National Oilwell and Nintendo both rose by one per cent, while Flir Systems was down 8 per cent.