Morningstar's contrarian shopping list for real return portfolios

Russia, energy and EMD

Morningstar's Edward Fane has been making contrarian calls across the firm's real return managed portfolios, adding investments in energy, Russia and emerging market debt.

The manager said the funds were cautiously positioned for most of last year, but now he is seeing "obvious areas of value" in contrarian ideas and has been adding to them across all four real return portfolios. "[For most of last year] the opportunity set has been pretty narrow, so the portfolios have been cautious up to now, with lots of cash and absolute return holdings, some more macro orientated hedge funds, and the fixed income weight held fairly low," Fane said. "But Russia, energy, emerging markets and EMD are the obvious areas for value now, so we are absolutely engaged in tho...