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A spotlight on Cornelian's private client performance

by Annabelle Williams on Dec 12, 2012 at 07:00

A spotlight on Cornelian's private client performance

Cornelian director and head of private clients and charities Marcus Brooks explains why select UK equities have powered performance over the past year.

Positioning

Brooks expects inflation to remain above 2% for the foreseeable future and to average out above 2% for the next decade. As such, he sees little value in fixed income broadly at the moment aside from holdings in a couple of top-performing corporate bond funds, which have attractive yields.

Instead, he has increased the equity weighting in his Medium Growth portfolio to 75%, adding to Europe on valuation grounds through a position in the long/short SWMC European fund.

‘The fact that the management team owns the business means their interests are aligned with ours,’ says Brooks, adding that he thinks manager Stuart Mitchell’s track record is impressive.

Brooks has also been tweaking his commodity exposure, selling his position in BHP Billiton and buying into Rio Tinto. ‘Commodities have fallen a long way, so there is value there,’ he says. He adds that he believes the consensus outlook for commodity demand understates the likely real demand.

However, he has sold out of gold mining fund CF Ruffer Baker Steel Gold and has also taken some profits on physical gold.

Performance

The portfolio returned 17% in the year to 5 October, outperforming the 16.7% return from the Apcims Balanced benchmark.

Positions in corporate bonds funds have contributed to the performance, most notably Eric Holt’s Royal London Sterling Extra Yield Bond fund, which is ranked first of 16 in the high-yield sector over the past three years.

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