Why Lang backs telecoms to re-rate but fears banks

Ardevora's Jeremy Lang, manager of the group's UK Income fund, remains nervous on banks but has renewed faith in opportunities in telecoms as the sector evolves.

Despite old-fashioned telecoms providers, which usually offer fixed lines, being unfashionable in recent years, Lang said these companies are set for a re-rating. He allocated towards BT in Q1 this year, and is currently running the maximum allocation possible in the fund of 5%. Lang sold out of BT in 2012 as a result of the internet and wireless booms, which drove down prices and hit the profits of the firms which had previously held a monopoly in the market. “BT went from a sleepy, benign environment to a radical change, whereby the landscape was very competitive,” he said. H...