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Jupiter's Clunie: I think we can hold our own
by Sarah Miloudi on Sep 05, 2013 at 07:43
Jupiter's James Clunie says shorting will give him an edge in the tough absolute return sector.
Clunie, who joined Jupiter in April and was later handed Philip Gibbs' £482 million Absolute Return fund, told Wealth Manager that spending hours poring over macroeconomic notes or trying to predict Mark Carney's next move would not help him beat the competition, and instead he planned to go long on value and short overpriced stocks.
He said this was 'sticking to his knitting' in light of his former role at Scottish Widows Investment Partnership (Swip), where he ran the Swip UK Flexible Strategy and took control of the UK Select Growth and UK Opportunities funds following equity head Peter Cockburn's departure.
However when asked how he would compete in the cutthroat absolute return space - home to Standard Life Investments' mammoth Global Absolute Return Strategy (Gars) and new launches the Invesco Perpetual Global Targeted Return fund and SLI's planned aggressive Gars portfolio - Clunie said his shorting skills would stand him in good stead.
'Short selling is something I have spent years and years researching - I know at least as much as everyone else,' he said, pointing to his strong track record at Swip which saw him deliver 24.5% on his Flexible Strategy over the three years ended in May, well ahead of the 2.4% by three-month sterling Libor over the same stretch.
Towards the end of his Swip tenure, Clunie told Wealth Manager he had been shorting retailer Mulberry when its shares stood at £20. He later added to his bearish position as the luxury market looked ready to tumble on the back of weakening Chinese growth, and was quickly rewarded as the stock tumbled to £14.
Clunie (pictured) refused to be drawn on rivals' offerings but said he felt he and the team could 'hold its own', and added the structure of Gibbs' former fund - a global multi-asset long/short vehicle - would remain unchanged, while rockier markets meant there was 'everything to play for'.
Initially, Clunie said the fund was likely to have a UK bias, and after running a model portfolio he expected to use September for timing opportunities.
'I'm hoping for a choppy September, and we seem to be getting that,' he said.
'[In long value] I'll be looking for unloved stocks with a high yield, but also in stable industries. Those fill the remit of an absolute return fund nicely. [On the short side it's] not growth with a catalyst,' Clunie continued.
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