The Premier Multi-Asset Global Growth fund now has its largest allocation to UK equity funds since it launched in 2010, according to its co-manager Simon Evan-Cook, while the Premier Multi-Asset Growth & Income fund has its largest UK equity weighting in more than a decade.
Evan-Cook said the team has increased its exposure to UK equities by between 3%-5% across both funds, meaning the former has a 20.8% weighting, while the latter has a 24.9% weighting.
This, according to the senior investment manager, is because they are currently trading on attractive valuations as investors have been panic-selling, yet should also provide protection across portfolios in the event of a sterling uptick or greater clarity regarding Brexit.
"Most investors are selling the UK and have been buying global. We think this could be quite a bad time to make that particular move because there is so much value in the UK," he explained.
"Sterling looks relatively cheap and we have seen over the last couple of months what could happen to global funds' performance in the eyes of a UK investor if sterling suddenly jumps. It is the reverse of what happened on 23 June 2016 following the Brexit vote when the global FTSE 100 rallied while sterling dropped.
"It felt as though [global-facing equities] had risen in value, but what really happened was we fell down a hole and we were staring up at some assets that effectively just stayed where they were."
If the reversal happens and sterling rises, according to Evan-Cook, overseas assets would likely struggle. Although he pointed out this is not a prediction, he believes "the risk of a really steep sterling devaluation feels lower than the chance of a revaluation following greater Brexit uncertainty".
"If you look at our portfolio weightings, it feels as though we are out on a limb, but all we are really doing is gripping the other side of the tree trunk to everyone else," he continued.
"I actually think everyone else is out on a limb because they are increasingly buying assets that will do well if we get deflation or recession or low growth. It feels to me that nobody is considering the possibility that things might be okay."
Not only are many UK funds with significant overseas revenue exposure more vulnerable to a sterling uptick, Evan-Cook said the types of companies these funds often hold are defensive and expensive firms, which have been increasing in value for a decade.
"What has me scratching my head the most is what bond markets are doing currently," Evan-Cook continued. "In the UK, we currently have a 0.75% yield on a 10-year gilt.
"That makes sense if you are only investing based on what has happened over the past ten years. But look at what politicians are saying - every day now Labour and the Conservatives are outbidding each other on public spending.
"That is so much more like the 1970s than the decade we have just had, in terms of public spending."
The senior investment manager explained that, because the public spending proposals being discussed include minimum wage rises and public sector pay rises, this will put money into the pockets of the people with the highest propensity to consume, which would therefore be "highly stimulative economically in the way that quantitative easing was never going to be."
"QE bought assets, which only asset owners would really benefit from. So the chance of that feeding through firstly into economic growth, but also into inflationary economic growth, was unlikely,"
"So now, investors are buying gilts that will give them a fixed 0.75% yield for the next decade. If inflation rises, or even if it stays where it is - it is at 1.5% currently but that is a relative low point -that will be a very bad place to have your money."
As such, Evan-Cook said Premier's Multi-Asset Global Growth and Global Growth & Income funds have a "value tilt" to them, although they ensure the funds are diversified overall.
"We are not trying to be polarised - we are never only going to own just one style. I do think [value/growth] is a swing of a pendulum, I do think it is just a cycle.
"What I cannot tell you is when that pendulum will peak and swing the other way. But what we do want to have is great value managers available at that point," the manager explained.
Given the underperformance of value funds relative to their quality counterparts over the last few years, the senior investment manager said only the "very best" value managers have managed to keep running money in what he described as a "Darwinian" industry.
"It is so hard to find value managers at the moment. If you take the UK small-cap sector, there are probably only three value managers in that sector. That is it," Evan-Cook said.
"We hold Fidelity UK Smaller Companies, run by Jonathan Winton. The team has been very good at managing capacity despite having had a lot of success over the last ten years.
"We also own Teviot UK Smaller Companies. It has done spectacularly well since launch in a market that does not suit it, and we now get the impression that the market is beginning to suit it.
"That is an example of how, if you can find a manager who has the flexibility and experience to genuinely just pick good investments and not worry about what everyone else is doing, you can make very good returns."