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Profile: Nutmeg - 'there is regulatory momentum behind us'
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by Danielle Levy on Jul 18, 2014 at 10:25
In contrast, he believes it is difficult to understand the aggregate risks associated with active portfolios.
Between October 2012 and the end of June, Nutmeg’s risk level six portfolio has posted a 17.4% return, while over the past 12 months the strategy is up 8.4%.
Port notes a call on ‘austerity Europe’ through exposure to Italian equities helped to power performance. The team put the trade on in November of last year when the market was trading cheaper than Thailand or Egypt, but have now started to trim the position.
He is now less negative on emerging markets compared with the beginning of the year, particularly due to a positive view on Indonesia. He believes the heady days of significant Chinese growth rates are over but says that this is almost priced in now.
Over the first half of the year, the team reduced exposure to small and mid caps in favour of large caps and Port remains positive on the FTSE 100, which he believes can continue to breach new highs. ‘There is no reason it can’t push ahead. I still think the S&P can break through the 2,000 level and I am not concerned about new highs.’
The portfolio currently has over 50% in developed market equities, which includes a significant weighting to UK equities, alongside a 3% exposure to emerging markets, 35% in fixed income and 4% in property securities.
Port says capital expenditure is on the up, as is employment growth, fuelling his expectation that interest rates could be hiked by November of this year.
Wage growth remains the missing piece, however. Next year he thinks UK economic growth could be over 3%, with sterling set to strengthen a long way from here.