Bambos Hambi, head of fund of funds management at Standard Life Investments, has refocused his UK equity exposure on value investors.
‘We have seen a rotation from mid and small-caps to larger companies, and also a rotation from growth to value,’ said Hambi (pictured).
From his MyFolio range of funds, which hold almost £5 billion, the Citywire + rated manager has trimmed his holdings in AAA-rated Julie Dean’s £2.3 billion Schroder UK Opportunities fund and AA-rated Adrian Frost and Adrian Gosden’s £6.7 billion Artemis Income fund.
‘It has the ability to be dynamic and actually deliver what is in the name,’ Hambi explained.
‘It is a fund that has more value characteristics than most other managers, and compared to the funds we have sold it generally has a little bit more in larger companies.’
Despite the repositioning, Hambi is still bullish on small and mid-caps generally.
‘We feel that is going to be the right way to be for a lot longer, but it was just reducing some of that larger overweight to mid and small-caps.’
Elsewhere in his portfolios, Hambi has also moved overweight European equities for the first time in his four years running the MyFolio strategies.
‘For the first time we are overweight in European equities,’ he stated. ‘That is on the back of actions by the central bank and on the back of improvements in corporate earnings.’
This view is expressed through the BlackRock Continental European Equity tracker fund.
Hambi has additionally used his MyFolio buying power recently as leverage with two fund groups.
First, he seeded the L&G Short Dated Sterling Corporate Bond Index fund at its launch in May, switching out of the iShares Markit iBoxx Corporate Bond 1-5 Years exchange-traded fund.
‘By moving to the Legal & General fund and by seeding a new fund, we are going to add to performance. It is the same benchmark in both cases, but the Legal & General fund is going to be much, much cheaper for our clients. We have negotiated very good terms and it all feeds back through to performance for our clients.’
Second, earlier this year Hambi secured a new share class from his own employer for its £179 million Japanese Equity Growth fund.
‘In terms of making sure we weren’t going to be impacted by the weak yen, we managed to encourage Standard Life Investments to launch a hedged share class for the Japanese fund, which we moved into in the second quarter.’
Hambi is a top-quartile performer in the Citywire Mixed Assets – Balanced sector over the past three years, returned 25.8% compared with the peer-group average of 18.7%.