Multi-asset manager Onuekwusi increases risk weightings

Aviva Investors’ Justin Onuekwusi has increased his exposure to risk assets across his multi-asset portfolios in recent months, including taking his first positions in high yield debt.

Onuekwusi manages Aviva Investors’ £20m Cautious Multi-Asset fund, £31m Balanced Managed Multi-Asset fund and £20m Adventurous Multi-Asset fund, which were all launched in November last year.

He has taken a 2% position in high yield in the Cautious fund and 3% in both Balanced Managed and Adventurous through investment in an internal fund, the Aviva Investors Global High Yield Bond fund.

“Recently we have ventured into the high yield bond market for the first time.

“This is because valuations are looking especially cheap compared to sovereign bonds, and yields have picked up considerably,” said Onuekwusi.

The foray into high yield has been part of the manager’s general move towards riskier assets.

Improvements in the US economy have also led him to increase his equity and emerging market debt exposure across the three funds.

He gained this exposure through investment in three of Aviva Investors’ internal funds, and one external: Aviva Global Convertibles; Aviva Emerging Market Inflation Linked Bond; Aviva Global Aggregate Currency Hedged Bond and Barclays Global Investors Emerging Market Tracker fund.

Onuekwusi has redeployed roughly 15% of the three funds’ cash weightings into these riskier assets.

“Obviously Europe remains the largest headwind. But my biggest worry is the mismatch between monetary policy and fiscal policy, as countries introduce further QE measures while simultaneously implementing drastic austerity measures.

“But Obama’s fiscal plan to prolong austerity measures until growth recovers makes sense.

“It is generally a bad idea to introduce austerity when growth is so weak.

“We need growth to get out of this vicious circle,” he said.

Onuekwusi’s three multi-asset products sit in the Specialist sector and each have a 70% exposure to passive funds, while the remaining 30% is in actively managed vehicles.

Onuekwusi recently took over management of Jason Josefs’ former funds, the £67m Aviva Investors Balanced Managed fund and the £1m Aviva Investors Manager of Manager fund, in addition to his three multi-asset portfolios.