Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Asset Allocation: seven questions for Charlotte Square’s Forsyth

Asset Allocation: seven questions for Charlotte Square’s Forsyth

We ask Charlotte Square's Amanda Forsyth seven important asset allocation questions.

Can you outline the breakdown or percentage split of your typical medium risk portfolio? 

One of our key tenets is to consider each client separately, so a ‘typical’ portfolio will be almost impossible to identify.

However, a client who comes to us seeking a ‘balanced’ portfolio in the Apcims sense (75% risk assets) will be given an initial outline showing around 55% in equities, split 25% in the UK and 30% international, and 20% in hedge and alternative assets. We have 5% in property trusts or funds, 10% in fixed interest, 5% in zero dividend preference shares and 5% cash. 

Zeroes have to be handled with care as they are not without risk. On the other hand, those with decent levels of cover and with diversified underlying assets can provide a useful proxy for some of the overvalued assets in the fixed interest space. Another useful tool has been the short-dated bond sector, which plays a valuable role in the current environment of low growth. We have used the Smith & Williamson fund with a degree of success here.

Within equity allocations, we are not tied to the heavy UK bias that often characterises a fund manager’s approach. We will include weightings to Asia and the US, and also certain thematic funds such as Herald Investment Trust.

What technical indicator are you watching most closely?

We still check gold. It has so many implications – risk aversion, dollar strength, inflation hedge – so day-to-day movements as well as medium-term trends can be enormously informative.

How has asset allocation changed over the last three months?

We’re starting to feel more optimistic about the medium-term outlook for shares, so while we are positioned for short-term volatility in the face of eurozone concerns in particular, we’re starting to explore ways to build risk exposure again.

Where are you seeing opportunities from a valuation perspective? 

Equities. They are far from being a one-way bet, but if a way can be found through the quagmire that is eurozone debt, the corporate sector looks to be in a relatively strong position in many cases, and that could get the chance to shine through.

Where could a potential surprise on the upside come from? 

We’re already seeing some signs of tentative recovery in the US. If the consumer there can rebuild some confidence, the implications for economic recovery are significant.

What is your current gilt exposure and how do you expect this to change over the coming year? 

Having bought them for clients who sought very little volatility in their portfolios, I’ve seen them deliver double-digit returns in the past year or so, and valuations are now stratospheric. I have therefore decided they no longer represent low risk, and have shifted them out of client portfolios.

What do you see as 2012’s potential black swans? 

I still feel there is a chance that inflation could surprise on the upside. We have had a stable oil price for quite some time, so the comparatives are starting to become easier. However, geopolitical factors are starting to drive it up again.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Sam Vecht: the best opportunities in frontier markets

Sam Vecht: the best opportunities in frontier markets

Blackrock's Vecht evaluates frontier markets and explains where he sees the opportunities

Play Where A-rated Pattullo is finding the best bond opportunities

Where A-rated Pattullo is finding the best bond opportunities

Henderson Global Investors head of retail fixed income explains how he is managing his fund against the surprise current monetary policy divergence.

1 Comment Play Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Taxicab Tenner: Allianz Global Investors' AA-rated Simon Gergel

Our much anticpated new series is here! We hand a black cab driver a tenner and grill the manager of the 125-year Merchants trust until the meter runs out.    

Your Business: Cover Star Club

Profile: meet the duo at the heart of Hargreave Hale's succession plan

Profile: meet the duo at the heart of Hargreave Hale's succession plan

For the first time in the company's history a non-Hargreave is now at the head of the north west broker and asset manager

Wealth Manager on Twitter