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Leodis Wealth: UK small caps look pretty as American beauty fades
by Elsa Buchanan on Oct 31, 2013 at 16:02
Robin Ghosh, investment manager at Leeds-based Leodis Wealth, is finding value in UK small caps and more nimble strategic bond funds but is increasingly wary of stretched valuations in the US.
A balanced income objective portfolio typically holds between 40% and 43% in UK equities, and Ghosh is at the upper end of his allocation range, with a ‘decent’ exposure to smaller companies.
‘We often prefer smaller companies funds – because of their size they can be a little more nimble at times,’ he said.
Holdings include Citywire AAA-rated Paul Marriage (pictured)’s Cazenove UK Smaller Companies and the S&W Revera UK Dynamic fund, run by Stephen Grant and Glen Nimmo, which Ghosh bought into very recently. ‘We love fund managers with high conviction and that fund fits our view,’ he said.
A third of his portfolio is allocated to fixed income, where Ghosh holds very little in government debt, preferring corporate, high yield and strategic/global bond funds.
Earlier this year he sold out of a number of direct corporate bonds holdings, which he had held since 2008/09 after buying them below par, citing Imperial Tobacco bonds as one example.
Since then, he has moved into the Old Mutual Strategic Bond and Royal London Sterling Extra Yield Bond funds, both being run with short durations. ‘We like them because they are not massively sized funds, and they are run by very good managers.’
Ghosh’s total overseas exposure is currently just 10% of the portfolio and he has reduced his weighting to US allocation after a long period of being overweight.
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