It’s time to sell shares in FTSE 100 oil producer Shell (SHEL), according to Henderson Opportunities Trust (HOT) manager James Henderson.

The trust will slowly reduce its position and recycle the proceeds into unloved AIM shares.

Sentiment has shifted for AIM stocks. Two years ago, a wave of retail money bid them up but now many of these investors have bailed out, and few institutional investors have been buyers, leading to a big sell-off.

The fund manager says Shell ‘has done its job’ in providing a cushion for Henderson Opportunities Trust during this year’s rocky market. He says a bullish outlook for oil and gas prices is precisely the time to reduce exposure to Shell and fellow portfolio holding Serica Energy (SQZ:AIM).

‘We are modestly contrarian and when the story sounds really good, you’ve got to be reducing exposure a bit. Quite a lot of the story about oil and gas prices has been articulated and markets are discounting mechanisms,’ he says.

Laura Foll, who co-manages Henderson Opportunities Trust, has been selling down a position in Severn Trent (SVT) from Lowland Investment Trust (LWI). ‘It’s a very good quality company but has rerated to a higher level versus where it has historically been, and the yield has compressed to the point where we can get better yields elsewhere,’ she explains.

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