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Correction protection: Marcus Brookes lifts cash to near record

by Eleanor Lawrie on Feb 05, 2014 at 11:00

Brookes sees potential in the funds but said he wants them to grow ‘manageably.’ ‘It would be nice to think we are doing a job to get up to £10 billion but it took Jupiter 16 years,’ he pointed out.

Getting into Japan and Europe early and largely avoiding emerging markets helped to drive performance
in 2013. 

Brookes’ only regret last year was that the team ‘should have had more of the stuff they owned and been more invested than we were’.

Another reason for the build-up of cash is because he has ‘taken the tops off’ some of the calls that have done well for him. He has now started trimming the biggest holding in Diversity, which is GLG Japan Core Alpha , managed by Citywire + rated Stephen Harker.

The holding, which was a 4.9% position at the end of December, rose by 55% in the past year, but Brookes does not think the investment case is still as strong.

‘As good as we think Steve is, and as good as we think the story is, I don’t think it’s as good a story as before,’ Brookes said.

‘We are trying to buy assets as they are declining. You want your maximum to be somewhere near the bottom.’

Europe

As Brookes views fixed income as expensive, he has been adding to equities, particularly in Europe. The Diversity fund has a 27% allocation to equities.

‘Equities have done really well, but there are pockets of value in Europe and Japan. We may be interpreted as cautious on equities but that is not really the case. We are not investing in a super-safe space.’

The multi-manager range invests in Cazenove European Income , Invesco Perpetual European Growth and Artemis European Growth , as Brookes explains these managers ‘share our view that the European recovery is going to come quicker than expected’.

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