Current Holdings
The portfolio has a heavy weighting to equity markets (84%) favouring US equities. US economic growth should provide support to equity markets over the coming 6-12 months, and the likelihood of Fed tapering in H2 2013 is high. As a result, we have a strong core position in the USD, further exposure (in addition to US equity) is through a 3x leveraged long/short trade vs the Euro. This was implemented due to where the different central banks were along the time scale to growth. We see the ECB maintaining loose monetary policy for the medium term while economic growth recovers, this is more so for Japan where the currency could see significant weakness. Given the strong policy in Japan and high levels of monetary easing we are bullish, however favour a hedged share class to reduce currency risk. Our largest weighting is within European equities, this is held through a blend of smaller companies exposure, to capitalise on high growth companies and a multi cap income fund focusing on business cycles (currently positioned in cyclicals). European equities are currently undervalued and economic indicators suggest the downturn is bottoming. Exposure to fast growing markets in both Asian and Emerging Markets is kept relatively low and we favour large high growth names (First State) in addition to the fast growing ASEAN countries. UK equity exposure is obtained through a small/mid cap income fund as we see this area of the market offering the better prospects of returns given the full value of large cap names.
Two specialist funds, healthcare is a sector that has strong macro drivers which look to spur further spending within the industry over the medium to long term. The sector has been relatively out of favour for a long period and is not fully valued. Furthermore it provides exposure to the high growth end of the US market.
Final exposure is through a specialist bond fund; Ignis Absolute Return fund provides diversification investing in government bonds primarily along the forward rate curve. Using hedging and derivative strategies they are able to minimise downside risk capitalising on miss pricing of rates against a long term macroeconomic viewpoint.
Any changes made to our portfolio will be displayed on the blog along with general updates and rationale. Given the short period the portfolio has been running there is no performance chart available at present.
Investments selected are not a recommendation to buy/sell, please seek professional investment advice before doing so your self.
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