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Fund of the Week: Artemis Strategic Assets
by Jonathan Miller on Oct 11, 2012 at 11:26
A couple of months ago, 10 year gilts fell to their lowest levels since the Bank of England started gathering the data back in 1703. They’ve risen a bit since then, but William Littlewood, manager of the Artemis Strategic Assets fund thinks they remain a total no-go area.
The fund itself is a multi asset one, investing in equities, bonds, currencies and also a small amount directly held in commodities. Shorting techniques are also used so the manager can try to profit from falling prices. This means the fund should be able to offer a level of capital protection when markets are down, but also allows it to participate in rising markets.
Due to his negative view on Western government bonds he currently has a major short position on them, although these have held the fund back in periods of risk aversion, as they’ve rallied.
But, Littlewood is undeterred as he thinks western government spending, which is higher than the revenues they raise , is a game that can’t go on forever. As we all know, central banks are happy to hit the printing presses to roll out further QE programmes and the US has made it clear that it will carry on with such measures until unemployment drops to their target level. Littlewood thinks this is a surefire way to create inflation.
On the equities side, positions have generally been reduced when the market is going up, and added to when it dips. He currently has a few short positions on some American stocks that are on high valuations as well as some defensive companies that no longer look compelling.
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