Cazenove's Rice on the 'arms race' for Nestlé

Cazenove's European fund manager, Chris Rice, said there has been an effective "arms race" among investors to buy into defensive companies such as Nestlé amid the recent sell-off.

Rice is one of the top performers in the sector over the long term, who has run the £869m European fund since 2002. He said investors have flocked to the food giant in recent months, but he has now moved underweight the stock after its price soared. “There has been an arms race to get as much Nestlé as possible into your portfolio. It is now on a trend P/E of 18 times, which is more than twice the market P/E of 7.7 times,” he said. “A few weeks ago we went underweight the stock, and we are also underweight the food producers for the first time since 2004, as they are on huge P/Es now....