Julius Baer's Andy Kastner is rotating his absolute return portfolio into defensive sectors including utilities and pharmaceuticals amid ongoing turmoil in European stock markets.
The manager of the £16m Swiss & Global JB Absolute Return Europe Equity fund has opened long short pair trades in defensive sectors in the expectation that the European sovereign debt crisis, the fall-out from the Japan earthquakes, and spiking volatility should support value stocks over growth companies. He introduced a pair trade at the end of April in the transport sector, with a long position in German car manufacturer BMW and a short in the highly cyclical German travel group TUI as part of this move. Kastner said he is continuing to focus on some selected cyclical stocks such as...
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