Why Melchior US managers are putting risk back

The managers of the £98m Melchior North American Opportunities fund have reversed out of defensive names into more economically sensitive sectors, following the string of positive economic data that has emerged from the US in recent months.

Peter Kaye and Nabeel Mughal said stronger than expected US jobs data and consumer confidence indicators had prompted them to put risk back on the table. “The portfolio is now more positioned for economic surprise in earnings and the economy,” said Mughal. “If you look at the macro data over the past six months, it has all been positive for the US, relative to Europe, so it looks like the European and US markets are decoupling.” The fund’s previous positioning meant it missed out on part of the market rally, after Kaye and Mughal rotated into defensive stocks last July on concern...