View the article online at http://citywire.co.uk/money/article/a610415
Fund managers choose career safety – loading risk onto investors
Popularity of bonds that offer below-inflation returns is a symptom of career risk aversion, JOHCM UK Opportunities manager John Wood says.
At the end of June GlaxoSmithKline (GSK.L) remained the fund's largest position, (4.2% of the portfolio) followed by catering firm Compass (CPG.L) and consumer goods giant Unilever (ULVR.L) (3.8% each).
Wood increased the fund’s cash from 4.4% at start of the year to peak at 15% in April. It has stayed at relatively elevated levels – 13.5% at the end of July – as Wood and co-manager Ben Leyland await further market falls to top up on their favoured long-term holdings.
Over five years to 3 August the fund had posted a return of 36.7% compared with 11.6% by the FTSE All Share.
Citywire Selection verdict:
This is the least volatile fund in the UK All Companies sector over three and five years yet comfortably outperforms the index. Such a unique risk/reward profile is rare. Wood and co-manager Ben Leyland focus on stocks and sectors that generate high returns on capital, which they believe is vital in a low growth environment. This astute approach helps the fund outperform, especially in downward markets, with Wood also holding over 10% in cash when valuations are deemed too high.
News sponsored by:
From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the funds
Look up the shares
- GlaxoSmithKline PLC (GSK.L)
- Compass Group PLC (CPG.L)
- Unilever PLC (ULVR.L)
- Imperial Tobacco Group PLC (IMT.L)
- British American Tobacco PLC (BATS.L)
- Reed Elsevier PLC (REL.L)
- Next PLC (NXT.L)
Look up the fund managers
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
by Daniel Grote on Sep 23, 2016 at 17:01