Merchants trust manager eyes mega caps for UK value

Banks proving attractive

Allianz' Simon Gergel, manager of the £500m Merchants trust, has said he is seeing the most value in mega-cap companies, including banking giants Lloyds and Barclays.

The manager said mega caps are looking more attractive, as companies begin to recover from a tough trading period. "Ironically, mega caps are where I see value. They have performed terribly but I see opportunities in almost all of them." At present, 66% of the trust's portfolio is invested in FTSE 100 names, while the rest is spread lower down the market-cap spectrum.  In the last six months, Gergel has added Lloyds and Barclays, as the banking sector recovery also attracts the attention of other fund managers. Both Lloyds and HSBC were in the trust's top ten holdings by the end...