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Performance review: SGPB Hambros’ Haynes recycles US profit into Europe

by Elsa Buchanan on Apr 15, 2014 at 09:41

Performance review: SGPB Hambros’ Haynes recycles US profit into Europe

Société Générale Private Banking Hambros’ portfolio management duo Eric Verleyen and Peter Haynes (pictured) have taken some profits on US positions, and plan to recycle the money into Europe.

Until two weeks ago, the balanced portfolio had a large US overweight mainly through a 4% position in Legg Mason Clearbridge US Aggressive Growth . Its biotech exposure proved a real attraction. Run by Citywire A-rated duo Richie Freeman and Evan Bauman, the fund has been their strongest performer with a 20.68% rise since it was bought in April.

However, the relative strength of sterling versus the US dollar has taken the shine off the portfolio’s unhedged US equity performance. Haynes explained: ‘We’re more conscious of relative valuations between geographical areas [and while] we don’t dislike the US, we think the gap between it and the eurozone is sufficient enough for us to take some profit out and redeploy into Europe.’

While the portfolio remains invested in the Jupiter European fund, managed by A-rated Alexander Darwall, Haynes is looking at a tracker fund with an Italian bias.

He is also considering a financial sector ETF. ‘That exposure would be more targeted than just buying an active fund.’

Hedged exposure to the GLG Japan CoreAlpha gives them a neutral position in Japan. The Citywire Selection pick, and one of Hayne’s top funds, is managed by +rated trio Jeffrey Atherton, Stephen Harker and Neil Edwards.

Haynes remains underweight emerging markets (EM), having sold out of his direct exposure last June, but says they are a long-term thematic play. He anticipates rebuilding this exposure but explained ‘valuations are cheap but it is still too risky to go into [EM] right now’.

Within the portfolio’s 18% bond allocation, he has reduced interest rate risk, favouring instead short duration high yield, subordinated financials and floating rate notes: ‘Our decision to not invest in government bonds added value across the board.’

The strongest performer was Jupiter Dynamic Bond , which added 7.4% in 2013, compared to the government bond benchmark, which was down 4.1% over the period.

Performance was also driven by the recent addition the Algebris Financial Credit fund, which has delivered 5% since its introduction last November.

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