Mark Martin, manager of Neptune UK Mid Cap Fund (GB00B909H085), has been using market volatility to top up his holding in Victrex (VCT), a manufacturer of polymers. These materials are used in products and areas such as smartphones, aeroplanes, cars, oil and gas operations, and medical devices.
"Amidst such turbulent markets, it is easy to imagine that short-term volatility impacts long-term company fundamentals across the board," said Mr Martin. "But this is not the case. It is important to note the nature of the market's volatility and, more significantly, what has been driving it. While China's growth has slowed and unnerved investors, such concerns are well understood, largely discounted and of less relevance to the UK than other economies globally.
"The UK domestic economy is uncertain in the short term given Brexit worries, but we continue to believe the UK offers numerous attractions to international and domestic investors with a long-term mindset. Any weakness in sterling will increase the attraction of UK companies - and their products - to overseas buyers.
"With this in mind, recent underperformance by mid and small caps looks overdone. Indiscriminate selling across all markets has provided good buying opportunities in certain sectors and among individual stocks. It could well be that there will be an even bigger buying opportunity in the coming months, but market timing is extremely difficult. So I have been topping up exposure to the companies I have the most conviction in of late, including Victrex."
IC also rates Victrex a 'buy' because of its strong track record and the long-term prospects for wider adoption of polyetheretherketone (PEEK) polymers. PEEK is a durable, high strength and lightweight plastic which has a combination of properties that improve reliability, reduce weight and energy usage.
Over the year to 30 September, Victrex's turnover rose 4 per cent, from £253m to £264m, and its pre-tax profit also rose by this percentage from £102.7m to £106.4m.
