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A spotlight on Courtiers' private client performance

A spotlight on Courtiers' private client performance

Courtiers’ director and chief investment officer Gary Reynolds has been building a level of protection into his portfolios after a strong year, in which he has benefited from holding a number of structured products.


Reynolds remains cautious on the outlook for markets and has put options on the S&P 500, which he hopes will provide protection if the market moves downwards.

‘The nice thing with those puts is that they are wonderfully defensive in falling markets,’ he said. ‘It’s not especially that we want to short the S&P 500, it’s just that it is a wonderfully liquid index so it is very easy to trade it.’

A number of structured notes have been ‘exceptional’ performers for Reynolds, particularly the Merrill Lynch Elders 22a variety, which has returned 13% for its Balanced Strategy Delta Adjusted portfolio, and Morgan Stanley’s autocallable note, which has returned 17% year-to-date.

‘We could get a really nice kicker on the Morgan Stanley one, but if it misses the call in January 2013 it will build to the next year,’ he said.


The portfolio has returned 16.25% over the year to 31 September, compared with a 11.42% rise in the IMA Mixed Investment 40-85% shares benchmark.

Performance was boosted by a position in the Aberforth UK Small Companies Trust. He is particularly positive on the management team.

‘They are so thorough. You don’t have to worry about Aberforth because they are all about their stocks and research, and they stick to what they know.’

The trust has returned 35% year-to-date. 

‘It’s all come good for them because they stay faithful to value,’ Reynolds added.

He has never been a fan of gold and has a short position in place, – however this has not performed well recently.

‘We have got all the economic reasons for why it is wrong and then it just goes the other way,’ he said. ‘It doesn’t hurt us too much though.’


Reynolds has a long position on the US dollar, as he believes that the currency is a safe haven for investors during times of economic turmoil.

‘The conclusion we came to is that when things get really tough the dollar is still the go-to currency. It’s not going to change as the world’s leading currency any time soon,’ he said, adding that investors are likely to remain wary of China’s currency and political system for some years to come.

‘That long dollar position will protect us on the downside. It doesn’t sound that exciting but we are quite positive on that.’

He is also looking at hedging against interest rate risk. ‘I suspect at some stage we will take a deep breath and go short gilt futures.

‘Then, if interest rates go through the roof, we are protected. We do not think we are quite there yet but that is getting a little bit closer.’

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