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Rathbones takes equity exposure to record high
by David Campbell on Oct 22, 2013 at 12:35
‘I remain very sceptical. We have gone slightly overweight, but we have almost been dragged reluctantly over the line,’ he said, adding he did not believe that prospects had been transformatively changed for either the economy or for the corporate sector.
Europe also remained off his radar, but he reserved his biggest concerns for emerging markets (EM), which he said in his view would remain unbuyable for the foreseeable future.
‘Fat tails aside, I think all the macro risk is in emerging markets. The commodity super-cycle appears to be over and that will remove a following wind that has driven EMs for many years. The potential for central bank error is still very high, in India, in Latin America. Parts of Asia are stronger but still the outlook is difficult.’
Within fixed income, the fund – building on research by Rathbones bond manager Bryn Jones – began incrementally buying back into eight-year plus gilts over the summer as yields rose back toward 3%.
He said 3.5% was the pivot point targeted by the company to jump back in with both feet – a target he believes will be reachable within the next few months, should leading indicators continue their underlying trend. That would also offer enough spread to coax it back into corporate debt.
The company went zero net duration at the beginning of the year, which Coombs admits was too early but which has in recent months proved more successful.
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by James Phillipps on Dec 09, 2013 at 07:52