Marathon Asset Management's Strategic Shift: Reducing DS Smith plc Stake

Marathon Asset Management Limited, a prominent investment firm, recently disclosed a significant reduction in its traded position in DS Smith plc (SMDS LN) ordinary shares. On December 17, 2024, the firm sold 6,918 shares at a price of £5.4433 each, representing a 1.31% stake in the company. This move, as indicated by their Form 8.3 disclosure, signals a strategic shift in Marathon's investment approach towards DS Smith plc.

The decrease in Marathon's position in SMDS LN Equity could be attributed to various factors, including market sentiment, DS Smith plc's financial performance, and Marathon's risk management strategies. The broader market correction, with the FTSE 100 index falling by 1.2% on the same day, may have influenced Marathon's decision to lock in profits or mitigate potential losses. Additionally, DS Smith plc's share price had been volatile, with a 5.4% decline in the preceding week, which could have further contributed to Marathon's strategic move.

Marathon's reduction in DS Smith's ordinary shares from 18,147,370 to 6,918 represents a significant decrease in their exposure to the packaging sector. This reduction, from 1.31% to 0.05%, indicates a strategic move by Marathon to diversify its portfolio or reassess its position in the sector. Despite the decrease, Marathon still holds a notable stake in DS Smith, suggesting they maintain an interest in the packaging sector.



Marathon's decision to decrease its position in SMDS LN Equity may also be influenced by their risk management strategies. The firm likely employed a stop-loss order, which automatically sells securities when they reach a certain price, limiting potential losses. Additionally, Marathon may have been practicing diversification, spreading their investments across multiple assets to mitigate risk. Their reduction in DS Smith's position could be a rebalancing act, ensuring their portfolio remains diversified.

In conclusion, Marathon Asset Management's strategic decision to reduce its position in DS Smith plc reflects a calculated approach to investment management. By considering market sentiment, financial performance, and risk management strategies, Marathon has demonstrated its commitment to maintaining a balanced and analytical investment strategy. As the market continues to evolve, investors like Marathon will remain vigilant in adjusting their portfolios to capitalize on opportunities and mitigate risks.