Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a733712

Performance review: why Towry's Wilson broke alternatives record

by Elsa Buchanan on Feb 19, 2014 at 08:47

Performance review: why Towry's Wilson broke alternatives record

Towry head of investment Andrew Wilson was betting on rising volatility providing a cheaper entry point to risk assets, but it was his passive allocation that was the big winner in 2013.

In the firm’s intermediate risk-targeted strategy, Wilson had 11.2% passive exposure in US and also UK equities, which returned 211 basis points (bps) and 293bps, respectively. The rest of the portfolio’s asset allocation was held in active managers.

Over the last 12 months, Wilson took profits from equity positions where they had drifted above target weight, with a view to recycling the money into other cheaper or underweight assets, although he admits that he did not get the hoped for opportunity to buy an equity market sell-off.

‘We expected a 10% excess correctional drawdown, particularly in the autumn, and to buy some more risk assets more cheaply at some point, but it never really happened,’ he said. ‘It was a bit of a shame from a strategy point of view.’

More recently, Wilson has maintained a small overweight position in long only equities, with a 56% allocation, but also with exposure to long short equity, with holdings including a large position in the Majedie Tortoise  fund, managed by Citywire AAA-rated Matthew Smith and Tom Morris.

He holds UK and US smaller companies as separate asset classes totalling 9.6% , including a holding in the River & Mercantile UK Smaller Companies fund. ‘The UK small caps’ risk was well rewarded in 2013 with a 220bps contribution to return while US small caps added an extra 84bps.’

In Europe, he retained a small exposure (4.2%) through ‘long-time core holding’ JOHCM Continental European  , run by A-rated Paul Wild, along with the Henderson European Focus trust and the BlackRock Continental  fund, managed by + rated Vincent Devlin.

‘A lot of investors were adding to European equities over the summer on the basis that they were relatively cheap versus the US, but our view was that while it was a bit cheaper, it was getting priced in quickly.’

However, Wilson said his allocation to the region could climb as high as 10%. ‘There will be an occasion to buy Europe more cheaply if we get a “European event” later on this year, possibly from the banking stress test, and ultimately some renewed eurozone volatility. We’ll lean against the wind on that, and look to buy in cheap.’

In Japan he is 'fairly neutral', with a 6.1% exposure.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Look up the funds

  • Majedie Tortoise A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Royal London UK Smaller Companies A
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • JOHCM Continental European A EUR
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • BlackRock Continental European A Inc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Prusik Asian Smaller Companies C
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Prusik Asian Equity Income 1 A
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Legal & General Dynamic Bond R Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • MLIS York Event Driven UCITS GBP A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the investment trusts

Look up the fund managers

  • Matthew Smith
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Tom Morris
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Paul Wild
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Vincent Devlin
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Heather Manners
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet