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City’s Calder on the case for European small caps
by Elsa Buchanan on Dec 13, 2013 at 12:29
Calder remains wary of interest rate rises and is finding value in floating-rate notes, backing investment trusts Neuberger Berman Floating Rate fund and JP Morgan Senior Secured Loans fund.
Conversely, he has completely pulled out of index-linkers and sold his direct gold exposure. ‘Inflation will come back into the system at some point, but we don’t think it will be in the short term.’
Over the past year, the portfolio has returned 10.54%, outperforming its UK CPI +4% benchmark, which rose 5.74% over the same period. Over two years, the model is up 18.32%, against the benchmark’s 12.87% rise.
Performance was driven by the portfolio’s exposure to the UK recovery through the Ardevora UK Equity fund, run by AA-rated Jeremy Lang and William Pattisson, and recent addition Saracen Global Income and Growth fund. Calder says his allocation to CF Miton’s US Opportunities fund also boosted performance.
Despite a ‘mixed’ year for alternatives, he cites the Morgan Stanley Diversified Alpha Plus fund as a key driver of profit.
Calder’s 7% South Asian equity position has hampered performance. That said, he will retain his allocation. ‘We are bullish on those regions due to the fact that the demographics are positive. These have been hit quite hard during quantitative easing tapering talks, but we’re comfortable holding our weights at present.’
More positively, he expects to shift more of the portfolio out of the US into Europe, where he forecasts things will continue to improve.
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- Ignis European Smaller Companies A Acc
- Findlay Park American GBP
- CF Miton US Opportunities A Acc
- Old Mutual UK Dynamic Equity A GBP Inc
- Insight - Absolute Insight Credit S USD
- Neuberger Berman Floating Rate Income Fund;A
- Ardevora UK Equity A
- Saracen Global Income and Growth Acc
- Morgan Stanley Diversified Alpha Plus ZH GBP