PSigma Balanced Managed Fund of Funds manager Tom Becket has cut his vehicle's equity weighting on e...
PSigma Balanced Managed Fund of Funds manager Tom Becket has cut his vehicle's equity weighting on expectations of a sharp market decline early this year.
Launched on 22 September 2008, the fund built up its equity exposure from a starting 40% to 55% in late November as stocks were punished at the height of the global market turmoil.
However, the manager slashed equity exposure back to 50% as the market rallied over the holiday break and he remains ready for more aggressive reductions should the revival continue.
"We remain extremely cautious about the outlook for equity markets in early 2009, as the awful realisation of the appalling economic environment unfolds and company profits disappoint the overly optimistic forecasts of bottom-up analysts," Becket says.
PSigma Balanced Managed Fund of Funds has performed well since launch, down just 1.8% against a 15.5% decline for the FTSE All Share over the period, according to Lipper (5 January).
Becket attributes the fund's strong relative performance to its non-sterling positions, as the pound collapsed against the euro, dollar and yen late last year.
The vast majority of the fund's initial equity weighting was in vehicles investing overseas, with the Newton International Bond fund the largest starting position at 8%.
"Our general equity strategy is to have a below-average weighting, combining funds either focussing on high-quality, large capitalisation companies, like Standard Life's UK Equity Growth fund," Becket says.
"Whilst our overall asset allocation remains cautious, we believe that an appropriate balance between defence and attack is the way forward."
