F&C’s multi-managers have begun reducing exposure to defensive funds across their Lifestyle portfolios in the view that the global economy is in a gradual recovery.
The team, led by Dean Cheeseman, has sold down positions in Neil Woodford’s Invesco Perpetual High Income, and Artemis Income, managed by Adrian Frost and Adrian Gosden.
Instead it has added to positions in Richard Buxton’s Schroder Alpha Plus fund, and BlackRock Special Situations, managed by Richard Plackett, across the Lifestyle fund range.
Plackett’s fund is now one of the larger positions in the funds at 7.5%.
The managers began to tilt the portfolios away from the more heavily defensive funds last year, moving out of First State Asia and into Veritas Asian, which they say takes a more strategic approach.
The team has also made some changes to the funds’ US exposure with a shift towards more actively managed holdings.
“We held all our US exposure in passives but now we hold Robeco US Premium Equities which is an all-cap player. We wanted a broader spread of the US equity market, not just large caps,” says fund manager Paul Carne.
“Our thesis is we are in a recovery – an anaemic recovery but a recovery nonetheless. From being in a miserable economic contraction from early 2009, we are moving to recovery, so we want less diversified and defensive funds and more directional managers, such as those exposed to market beta 1 or a bit higher, and dynamic managers that will move their positions with prevailing trends,” he says.
In the bond portion of the portfolios the team has sold down Standard Life Investments Select Income in favour of larger weightings to Ian Spreadbury’s Fidelity Strategic Bond and Richard Hodges’ L&G Dynamic Bond.
“In fixed income we wanted to take on more directionality as well, to be more exposed to spreads and away from defensives,” Carne explains.
