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OakTree Wealth’s Brady: the party is over
by Elsa Buchanan on Jan 10, 2014 at 13:07
OakTree Wealth Management founder Ian Brady traded emerging market exposure ahead of this summer slide for European and US equities, but is wary about the current run in risk assets.
In the firm’s Income and Growth model portfolio, Brady (pictured) shaved 9% off Asia and emerging markets ahead of May on his concerns about risk-taking in credit and property.
‘Because a lot of consumption was credit-based, we moved our allocation into continental Europe and the US to 7% and 7.5% respectively,’ he said. He holds a 3% allocation to Invesco Perpetual European Equity Income fund, run by Citywire AA-rated Stephanie Butcher, and a 12% exposure to Newton Higher Income fund.
Brady, who is also the company’s chief investment officer, is playing Japanese equities momentum, adding 15% in late 2012, before taking some profits over the summer.
More recently Brady has upped his allocation to 7% via AA-rated Chris Taylor’s Neptune Japan Opportunities fund, Paul Chesson and Tony Robert’s Invesco Perpetual Japan , And Citywire AA-rated Scott McGlashan and Ruth Nash’s JO Hambro Japan fund.
‘We were very positive on Japan but didn’t expect an 80% rally six months ago.’
Former cover star Brady currently holds 40% of the portfolio in sterling-based assets but is wary of high yielding companies which he says don’t necessarily offer further growth. He adds that at current valuations UK equity remains vulnerable to ‘earnings disappointments’.
However, Brady favours tobacco stocks, selected pharmaceuticals that can grow margins and selected capital goods companies, which can benefit from growing business expenditure. ‘Those only should do well’.
In fixed income, Brady has not held gilts for the best part of last year, instead moving his exposure to short duration credit-sensitive bonds through the Cazenove Strategic Bond fund and the TwentyFour Monument Bond fund.
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- Invesco Perpetual European Equity Income Acc
- Newton Higher Income GBP Inc
- Neptune Japan Opportunities A Acc GBP
- Invesco Perpetual Japan Acc
- JOHCM Japan B GBP
- Cazenove Strategic Bond B Acc
- PFS TwentyFour Monument Bond A Acc
- Capital International Emerging Markets Fund B GBP
- Schroder Asian Income Maximiser A Acc