Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a646319

Hawksmoor’s Scott and Lockyer prepare for inflation's return

by Matthew Goodburn on Dec 18, 2012 at 00:01

Hawksmoor’s Scott and Lockyer prepare for inflation's return

Phoenix Hawksmoor Vanbrugh  fund managers Richard Scott and Daniel Lockyer are positioning for what they believe will be a future inflationary environment, sparked by further quantitative easing (QE) working its way through the financial system.

Inflation to return

Richard Scott said that two core holdings, M&G UK Inflation Linked Corporate Bond and Kames Inflation Linked Bond now accounted for around 10% of the portfolio in anticipation of inflation returning over the mid-term.

While Scott said he was unsure of the exact timing, when inflation did strike it was likely to happen quite quickly, so he and Lockyer are taking pre-emptive action to protect investors.

Scott told Citywire: ‘It’s a bit like Noah’s ark. You have to build your position before it happens. QE is a serious risk and it is hard not to see inflation further out.’

While not owning gilts last year hurt short-term numbers on the Citywire Selection Watchlist fund, Scott conceded that his inflation-linked bond exposure may also cause short-term underperformance in the next few months, but ultimately the stance would be justified.

‘It may hurt numbers for a little while but this is a cautious fund and we think it is wise to be prudent.’

Scott said the launch of the duo’s income-focused Hawksmoor Distribution fund earlier this year had led them to become more cautious overall on the Vanbrugh fund over the past few months. The Distribution fund, which is yielding around 4.2%, sits in the Apcims Balanced Managed sector and is run as a slightly more adventurous mandate.  phoenix hawks

The Vanbrugh fund has around 25% in equity income with the emphasis on global income, and key stakes in Prusik Asian Equity Income and Veritas Global Income.

Adding to European equities

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy


Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.

More about this article:

Look up the funds

  • Phoenix Hawksmoor Vanbrugh A Inc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • M&G UK Inflation Linked Corporate Bond A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Kames Inflation Linked B GBP Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Jupiter Strategic Bond Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Cazenove Strategic Bond B Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the fund managers

  • Richard Scott
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Daniel Lockyer
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive


Sorry, this link is not
quite ready yet