Joe Bauernfreund, manager of the £1.2bn AVI Global trust, has been reducing the gearing on the portfolio since the end of 2021 and “slowly but surely” eliminated the entirety of the gearing and moved to a small cash position.
He said this move was due to a combination of the shifting monetary policy and evaluation concerns. According to Morningstar, the trust has had a three-year high of 13% gearing and is able to go as high as 20%. With gearing at zero, the trust now also has 12.8% in cash. "In general, I do not like the idea of trying to time markets and trying to have major cash positions at various points in time," the manager said. "But I do, at the margin, like to adjust the gearing at points in time where it feels right to have a bit of capital available to us in our in our back pockets." He sa...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes