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What has Tom Becket bought and sold?
by Emma Dunkley on Dec 11, 2012 at 10:08
Tom Becket, chief investment officer at PSigma Investment Management, discusses why he is looking to China and his cautious view on corporate credit.
Are you selling out of any active holdings at the moment in favour of exchange-traded funds (ETFs)?
We are selling some of our exposure to defensive emerging market equities at this point from our active fund holding, in the view that the market is polarised between high quality businesses with robust business models, and everything else.
Cyclical names have underperformed, especially those in relation to China, and there is this price weakness because of growing concern over China’s long-term health.
So we are looking to sell some of our defensive equity names and putting this money into the iShares FTSE/Xinhua China 25 ETF.
We like this ETF because it is liquid, it tracks the index we want and it provides us with exposure to behemoth names, such as China Mobile. It is also cheap and offers us this recovery play on China. We want to exploit the rout in the China index and an ETF can give us the upside we want.
What’s your view on China more broadly?
I’m surprised how the market has gone from optimism to pessimism over China. In our view, there will likely be further upswing and recovery in the next few months, which will be nurtured by the new leaders in China.
I’m also more bullish following my trip to China. The country is on the right track but it will be a bumpy ride in the short term. I’d rather invest in China when people are cautious, rather than when people were too bullish.
What about global equities, have you bought any passives in this space?
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