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/a754430

Performance review: why Vestra’s Lakshmanan has slashed equity exposure

by Elsa Buchanan on Jun 09, 2014 at 14:24

Performance review: why Vestra’s Lakshmanan has slashed equity exposure

Vestra Wealth head of investment solutions Meena Lakshmanan has slashed her equity exposure by 10%, rotating most of this into cash as she looks to lock in profits.

This has reduced the equity weighting in the firm’s mid-risk model portfolio to neutral after being overweight last year.

‘After increasing allocation to equities in 2013, we realised that, if you look at last year’s earnings performance of equity markets, quite a lot has come in the US and Europe – at least on multiple expansion – as opposed to earnings,’ she said. ‘Therefore, we felt that if earnings disappoint even a little bit, the markets would be quite vulnerable to a pullback.’

The bulk of the proceeds, some 7%, has been moved into cash while Lakshmanan eyes other potential opportunities.

She has reduced exposure to European equities, moving to a neutral weighting. Last September, she took a position in the Alken European Opportunities fund, managed by Citywire A-rated Nicolas Walewski. She also owns AA-rated Alister Hibbert’s BlackRock European Dynamic fund and the Comgest Growth Europe fund.

Lakshmanan has also moved more neutral on the US, over what she considers stretched valuations and negligible earnings growth. She holds the Findlay Park American , T Rowe Price Small Cap Stock and Morgan Stanley US Advantage funds.

‘It is a stock-picker’s market, where some stocks have got carried away after rallying in 2013, in particular in biotech and technology, but where we have seen a very sharp reversal from growth to value this year. Against those pretty decent pullbacks, the markets are still up but stock specifics are being driven by big news events,’ she added, highlighting a continuation of share buybacks across the Atlantic.

Emerging market exposure

Lakshmanan believes emerging markets (EM) could provide better opportunities as earnings recover. ‘While consumer staples are very expensive in EM, trading at very high multiples, energy companies or industrials are trading on more attractive price to earnings ratios. If structural reforms are being enacted in the EM, and we don’t see another big “taper tantrum”, we could see signs of a pick-up.’

She highlights AA-rated Jonathan Asante’s First State Global Emerging Markets fund and A-rated Devan Kaloo’s Aberdeen Emerging Markets Equity fund. She also has exposure to Lazard Emerging Markets , managed by A-rated James Donald, and the Somerset Emerging Markets Dividend Growth fund, managed by AA-rated Edward Lam.

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

  • Alken Fund - European Opportunities-GB1
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • BlackRock European Dynamic A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Comgest Growth Europe Euro
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Findlay Park American GBP
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • T Rowe Price Small-Cap Stock Fund
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Morgan Stanley US Advantage Z USD
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • First State Global Emerging Markets A GBP Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Aberdeen Emerging Markets Equity A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Lazard Emerging Markets Equity
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Somerset Emerging Markets Dividend Growth A Acc
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • GLG Japan CoreAlpha Equity I JPY
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Look up the fund managers

  • Nicolas Walewski
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Alister Hibbert
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Jonathan Asante
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Devan Kaloo
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • James Donald
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Edward Lam
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Jeffrey Atherton
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Stephen Harker
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Neil Edwards
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

Archive

On the road

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

Sorry, this link is not
quite ready yet