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View the article online at http://citywire.co.uk/wealth-manager/article/a749858

Kames’ Snowden hits out at ‘multi-asset’ corporate bond funds

by Eleanor Lawrie on May 07, 2014 at 07:00

‘We are not going down when everyone else goes down. To my mind, that should be the purpose of an absolute return fund,’ he said.

The fund is currently shorting mining company Anglo-American debt, in favour of a long position in Glencore Xstrata credit, because Snowden feels both have been mispriced by the market.

‘Glencore Xstrata trades cheaper than Anglo American and I think that is wrong. Glencore Xstrata is a bigger, more diversified business than it has been. Anglo American has had problems in South Africa so I think it’s too expensive. Those valuations should flip over.’

He is also pair-trading government bonds, with a long position on bunds and a short on Treasuries, as he feels interest rates won’t rise any time soon in the eurozone, but are set to rise in the US.

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