Tony Yousefian has realigned the OPM Balanced Managed fund on a far more cautious footing having been hit hard in the fallout from the collapse of Lehman.
Tony Yousefian has realigned the OPM Balanced Managed fund on a far more cautious footing having been hit hard in the fallout from the collapse of Lehman.
At the start of 2008 the fund was positioned in expectation of a recovery in the second half of the year.
He says the fund was hit by overweight holdings in emerging markets and the US, on the belief the former could weather the downturn and the latter would start seeing economic stability.
"We were expecting a few market rallies, albeit built on hope and not on fundamentals. Regretfully, with the demise of Lehmans all bets were off. We were more or less fully invested."
"The fund is far more cautious now - on a tactical rather than strategic basis. We used the rallies of early November, December and January to sell into strength and considerably reduce the risk in our fund," Yousefian adds.
On 28 October, the portfolio fell to £12.7m, but it has now grown again to £14.4m, as at 13 February.
Yousefian says: "We have invested in tactical assets and now have 6% in ETF shorts (SP 500 shorts and FTSE 100 shorts) in order to have negative correlation to the market. We also have 15.5% cash."
He maintains he still likes the long-term outlook for the US and China, but sees the equity markets as being extremely volatile short term so has taken steps to reduce the volatility.
"Our exposure to China is through db x-trackers (1.31%) and the Lazard Emerging Markets fund (2%). In the US we hold Neptune US Opportunities, Legg Mason US Equity and the Axa Framlington Biotech fund."
Yousefian has also grown his portfolio's bond exposure, having had no exposure to the asset class last October.
"We now have 10% exposure to corporate debt and government debt, with a 70%:30% split. We have just increased the overall bond exposure from 7.2% to 10%."
