Weldon hit hard by cyclicals

Threadneedle's Cormac Weldon has reduced his fund's allocation to banks after being hit by consolidation among cyclical stocks earlier this year.

The head of US equities said the portfolios did not perform well in the year to mid August due to their exposure to cyclical businesses, such as banks, in the face of deteriorating economic confidence. Weldon reduced the financials exposure in the £1.2bn Threadneedle American Select fund by 4.5% in August, taking it to 9.6%. “Earlier this year stocks were trading on a discount and we were on the wrong side of this as we did not believe in the double dip,” Weldon said. “We had too much exposure to cyclicals, mainly banks, to which we had increased our allocation just as the discount...