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How this wealth manager is navigating QE-driven bubbles
by James Phillipps on Oct 10, 2013 at 14:41
IBoss managing director Chris Metcalfe is cautious of asset prices fuelled by quantitative easing (QE). He favours underlying managers with a pragmatic and flexible approach, particularly in IBoss’s fixed income and UK and global equity exposure.
Metcalfe, who oversees IBoss’s suite of risk-graded funds, is backing global equity managers with a 10% weighting in the average balanced fund.
Over the last year, concerns about the size of the £7.38 billion M&G Global Dividend fund have led him to sell out and funnel the proceeds into Invesco Perpetual Global Equity Income and the much smaller Old Mutual Global Equity , which is team managed but led by AAA-rated Ian Heslop.
‘The M&G fund was taking a lot of money and although they say they can accommodate it, I was concerned about the cash drag and feared that its size would see it drifting back to the benchmark,’ Metcalfe said.
‘The Old Mutual Global Equity fund is small at £24 million, but it is run using a quantitative strategy and has a great track record. The Invesco Perpetual Global Equity Income fund leverages off the great regional managers they have and the two funds complement each other.’
Similarly, in his 18% exposure to UK growth, he holds JOHCM UK Opportunities , run by John Wood, which has a 9% cash weighting. Although Metcalfe concedes this has cost Wood on a relative performance basis over one year, he continues to back the manager, rating him as a strong stock picker.
Elsewhere, he holds 8% in Asia Pacific equities, 5% in UK equity income, 6% apiece in global emerging markets and Europe, and 4% in the US.
This includes a position in the Fidelity Emerging Europe Middle East and Africa fund, alongside the Somerset Emerging Market Dividend Growth fund.He said both have ‘consistently beaten their peer group by taking strong active stances’, and fit with his stance of avoiding the mega funds that dominate their sectors.
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