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Investment funds tour: Psigma IM's Lions XV

With the Lions rugby tour in full swing, Psigma's senior team get together to reveal who makes their line up, comparing players to some of their top investment picks.  

Psigma’s Lions XV – “The Greatest Challenge Ahead”

Darrell Mercer (managing director), Tom Becket (chief investment officer), Rory McPherson (head of investment strategy), Frank McGarry (director of business development and marketing) and Danny Adams (senior investment manager) get together to pick their Lions starting XV.

Darrell Mercer (DM): Well here we go then guys, the biggest decision of the summer; it’s time to pick our starting Lions XV. It’s good to see all four home nations are taking part here today, with Frank as Ireland, Rory as Scotland and Danny as England. Tom, you picked nearly a whole starting Welsh line up, so I guess that makes you Welsh today.

Tom Becket (TB): Not that I know of, but my wife is Welsh, my kids are half-Welsh and I’m just thinking the way Gatland will!

DM: Before we get to the team what do you think of the chances the Lions have in making this a second winning Test tour in a row?

Danny Adams (DA): It pains me to say, but I’m relatively bearish. I can’t see how we have much chance. Not because we lack talent, but there just isn’t enough time to gel and we are going to play the very best in the world. My prediction would be a 3-0 loss. If we are to have any hope, we have to win that first Test.

Frank McGarry (FMG): I’m either mad or bullish, but I’m optimistic. I think we’ll win.

Rory McPherson (RMP): You might be both, Frank. A bit like my market view, I’m cautiously optimistic. There’s a risk it could go either way, but it will be close and like our portfolios, I think the Lions are well positioned.

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Psigma’s Lions XV – “The Greatest Challenge Ahead”

Darrell Mercer (managing director), Tom Becket (chief investment officer), Rory McPherson (head of investment strategy), Frank McGarry (director of business development and marketing) and Danny Adams (senior investment manager) get together to pick their Lions starting XV.

Darrell Mercer (DM): Well here we go then guys, the biggest decision of the summer; it’s time to pick our starting Lions XV. It’s good to see all four home nations are taking part here today, with Frank as Ireland, Rory as Scotland and Danny as England. Tom, you picked nearly a whole starting Welsh line up, so I guess that makes you Welsh today.

Tom Becket (TB): Not that I know of, but my wife is Welsh, my kids are half-Welsh and I’m just thinking the way Gatland will!

DM: Before we get to the team what do you think of the chances the Lions have in making this a second winning Test tour in a row?

Danny Adams (DA): It pains me to say, but I’m relatively bearish. I can’t see how we have much chance. Not because we lack talent, but there just isn’t enough time to gel and we are going to play the very best in the world. My prediction would be a 3-0 loss. If we are to have any hope, we have to win that first Test.

Frank McGarry (FMG): I’m either mad or bullish, but I’m optimistic. I think we’ll win.

Rory McPherson (RMP): You might be both, Frank. A bit like my market view, I’m cautiously optimistic. There’s a risk it could go either way, but it will be close and like our portfolios, I think the Lions are well positioned.

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Tadgh Furlong

DM: Let’s get on with the team. Front row first, which I see as being a real strong point for the Lions. Rory, who do you have at Tighthead Prop.

RMP: It has to be Tadgh Furlong after his excellent Six Nations tournament and solid performances thus far. Like many great front row players, this lad might go unnoticed to the untrained eye, but then he will have the pundits drooling in the post-match analysis. To me he is a bit like Neuberger Berman Short Duration Emerging Market Debt Fund in our portfolios. If you’re looking for a bulldozing show pony in your front row then this ain’t your boy. However, if the contest gets heated, expect this fella to be digging his heels in and driving the team forward – a heavyweight scrummager who’s hard to shift.

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Ken Owens

TB: Can’t argue with that. I went with Ken Owens at Hooker…

DA: Because he’s Welsh?

TB: No because I think he’s the best hooker they have taken, but the consensus here selected Rory Best ahead of the tour, although I think he’s now unlikely.

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Rory Best

FMG: Rory would still be my choice; another leader on the pitch and a belligerent lump. He’s also a dependable front row man that does the basics well. In our portfolio he would be Fidelity Global Index Linked. If the game heats up and inflation rises, expect this guy to hit his marks. Like the props he’s flanked by, Best also brings a lot of fight to the scrummage and having led Ireland to victory over New Zealand on that glorious November day in Chicago, he knows how to win.

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Mako Vunipola

DM: I’ll take the Loosehead Prop and have gone with Mako Vunipola. I liken him to Jupiter Absolute Return which we have just increased across our strategies; he does the basics well but really gets the nod on his ability to carry the ball forward when the going gets rough. If the going’s easy then don’t expect too much from this boy, but if it gets hairy then expect this lad to take the fight to the All Blacks.

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Kyle Sinckler

DA: It’s still relatively early in the tour but I think Kyle Sinckler has a great shot at being in or around the test team at Tighthead in the series for similar reasons to Vunipola’s likely selection.

DM: Decent shout, particularly after his performances so far on tour. I think Kruis and Lawes could be in the mix for selection, but who do we collectively have at lock?

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Alun Wyn Jones

DA: I think there majority of Psigma selections had Maro Itoje and Alun Wyn Jones, although I think George Kruis’s lineout abilities will mean he’s close to starting and he has been superb on the tour. Our selections have a great mix of youthful energy and experience.

To me, Itoje is the epitome of the modern day utility player and in our portfolios he would be Legg Mason RARE Infrastructure. Much like the team at RARE, Itoje reads the game well and knows the importance of getting points on the board. In difficult conditions both will secure much-needed ground.

Wyn Jones is just a massive player for the Lions and if he’s fit he will be in the team. Inspirational in the last four years, just as our position in Twentyfour Asset Backed Income has been. Given the lack of yield available elsewhere, the best could still be to come from European asset backed securities and let’s hope the same is true for Alan Wyn.

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CJ Stander

DM: The biggest debate will undoubtedly be over the back row, given the strength in depth and options Gatland has to choose from, but before the tour we collectively thought that CJ Stander would start, pushed all the way by Sean O’Brien. The number six shirt can sometimes be under-appreciated but Stander more than fills it. Like First State Global Resources, he is a potential match winner capable of bursts of power and flair, not to mention brute strength with the ball in hand. A resourceful contrarian who will get his head in places most others wouldn’t dare. We expect his industry to be rewarded with some big hits at the right time as well as surging runs that leave others trailing in his wake.

TB: I like Stander and I think he suits Gatland’s style of play, although Moriarty and Tipuric (both Welsh), as well as O’Mahony will be in the mix. I think it is a place where Gatland has a lot of thinking to do. Yet another Welsh selection from me at open-side flanker, with captain and inspiration Sam Warburton. Fortunately he is now starting to find form. Gets everywhere and will not leave any stone unturned. A bit like our position in Ashmore Emerging Market Total Return Debt, he gets his head in places others would shy away from but has a canny knack of turning play over and getting the team on the front foot.

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Toby Faletau

FMG: I assume we’ve no argument with the selection of Toby Faletau at Number 8, particularly after his performance in the opening game and the loss of Billy Vunipola?

RMP: Billy who?!! Faletau is a wonderful player and on course to be a Lions legend. He has the impact on the team like Artemis Global Income has had on our portfolios in the last four years. Both constantly smash it up over the gain line and not afraid to pick up the ball from places others wouldn’t. In addition to individual brilliance this guy is a great team man. Expect him to be everyone’s best buddy on the Lions DVD video.

DM: I think that’s a great pack and it will have to perform well. My view is that if we are going to win we will have to do it up front. We should have the edge at the scrum and our line-out should work well. Hopefully we can win the vital battle of the breakdown.

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Connor Murray

DA: We didn’t argue too much over the pack. I’ll start us off in the backs, which I think will be more contentious. I think we all assume that Connor Murray will start at scrum half? I like him because he is cocky and impetuous; exactly the kind of guy you’re glad is on your side. Rhys Webb is a decent backup, but I worry about his discipline. RWC Nissay Japan Focus could be our version of Murray in our portfolios. Both play a very concentrated, direct style which we think will be ideally suited to both the market conditions and ruby matches ahead. If things do take a turn for the worse then this guy’s innate defensive qualities will be exactly the sort of currency the Lions want to be dealing in.

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Jonny Sexton

FMG: I think Murray’s the obvious choice at scrum-half, although Rhys Webb is great to have on the bench and if he plays it wouldn’t weaken the team massively. Fly-half is more debatable, particularly after Saturday’s match. We all selected Jonny Sexton as a starter ahead of the tour but he needs to find form.

When he is on song, he is very much the modern European fly-half and plays the role that the short duration, European bond fund Twentyfour Focus does in our portfolios. He should be exactly the guy you want to keep the scoreboard ticking over and his game management is immense. Like Twentyfour Focus he oozes control and good distribution, accumulates points and brings brawn too. Expect to see Beadun Barret getting rocked back on his bottle as this guy makes some hard gains to complement his distribution to the flyers outside.

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Owen Farrell

DM: A controversial choice at inside centre, but the majority at Psigma pencilled in Owen Farrell before the tour. I think he’s our best player and simply has to play, but I would now have him at fly-half. Trying to combine both Sexton and Farrell would be too hard to do in the time available, so I would personally have had Ben Te’o at inside centre and Farrell starting at fly-half.

I think the guy’s a points machine at currently at the very the top of his game. When it comes to distribution, this guy is hard to rival and for a young guy has an embarrassment of experience. We expect to see him operating in a tight and congested mid-field and expect his distribution to shine through and spark performance across the rest of the team. That makes him like the Airlie Strategic Focus fund in our portfolios; a high yielding US fixed income fund, with constant scoreboard pressure.

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Jonathan Davies

TB: Whether it is Farrell or Te’o at inside centre, I expect them to be passing to Jonathan Davies outside them. For me he was the standout player of the last tour to Australia and is a tried and tested Gatland man. His style is somewhat under-rated and arguably he lacks flair but, much as our conviction investment in Polar Capital Healthcare, you know what you are going to get and he rarely lets you down. Moreover, his recent form has been sensational. Not the flashiest performer but very much 'Mr Consistency' and, like the Healthcare sector, one we expect to win out in a tight contest.

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Elliot Daly

DA: On to the back three then, and I think we have to have Elliot Daly in there. An out-and-out flyer in the right conditions and can totally surprise the opposition, a bit like the River & Mercantile World Recovery in our portfolios. They both have impetuous flair combined with shrewd positional sense. If the game opens up then expect this guy to be racking up the points and giving the team the “X-factor” that might just tease out a series win. He can also kick the ball a long way!

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George North

FMG: Danny’s confidence is rising the longer we go on! I think everyone thinks that George North is the man in charge of the opposite wing. What a player and I still smile at the picture of him carrying Israel Folau and using him as a battering ram four years ago. A consistent alpha generator and mercurial talent, I would match him up to the outstanding Blackrock Asian Growth Leaders fund in our portfolios. Simply irresistible when on song and never lets you down. If the ball gets out wide I expect him to do great damage and rack up the points like Blackrock have done for us in the last few years.

RMP: If we could get a back three of Daly, North and Antony Watson on the pitch and firing then it could be a great series to watch. Mercurial, fleet of foot and when in form constantly making ground, to me Watson is a bit like Royal London UK Equity Income; he has the constant ability to surprise on the upside, especially if his style is in favour, which it will need to be to beat the All Blacks.

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George Kruis

DM: I like the team; a great mix of solid defence and attacking flair. Looks like our rugby selections and portfolio construction techniques are closely aligned. One final question. Who’s your surprise player in the starting XV?

DA: I am going to suggest two, George Kruis and Jamie George, both of whom are pushing hard right now. Continuity is so important in rugby and having the Saracens combination at the key lineout seems fairly obvious to me.

FMG: He hasn’t been great on tour, although he has now shown signs of what he can bring to the team, but Iain Henderson may get a call up to the bench. As he showed in the last game of the six nations, he can dominate.

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Ben Te'o

TB: I know the back row is hotly contested, but Justin Tipuric for his turn-over ability.

DM: I have gone for Ben Te’o. By the time we get to the tests he might be less of a surprise. Rory, are there any Scots to choose from?

RMP: Not many! I feel for Hogg heading home. How about Tommy Seymour on the wing? No, probably not. I’ve definitely got a lot more conviction in our starting XV and our investment strategy!

TB: Regardless of who ultimately gets picked, the Lions Test Series and investment market viewing is shaping up to be sensationally exciting. My advice to Gatland and investors would be pick your selections, back them with high conviction and be totally prepared to change strategy if conditions start to change. For the Lions, much as for investors, it is going to be one hell of a ride.

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