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MPS Investment Committee: Creating the right blend for the year ahead

Simon Brett - Creating the right blend

Simon Brett, Chief Investment Officer at Parmenion, discusses how they are creating the right blend within their models for the year ahead.

‘Parmenion manages over £4 billion in fund-based portfolios on behalf of clients of UK financial advisers across a range of different mandates, including income, ethical and drawdown specific models. Our strategic solutions offer advisers the option to blend active with passive funds as they decide, while in our strategic conviction solution, we decide, asset class by asset class, how to balance this decision.

In our tactical portfolios, we are overweight in Europe and Japan, neutral on emerging markets and the US, and underweight the UK.

The Brexit uncertainty is taking some wind out of our domestic economy

The Brexit uncertainty is taking some wind out of our domestic economy and we are minded to remain cautious on the asset class. Against this background, it is key that we choose fund managers who have solid track records in the sector and who are open with us on their process and investment philosophy.

Lindsell Train UK Equity, and the Jupiter and Liontrust Special Situations funds, all have a distinctive styles when picking companies in which to invest. Selecting good funds in an asset class is as important as getting the asset class weighting right.

Although our neutral weighting may change this year, notwithstanding higher interest rates, we have added a couple of funds to the US asset class. Vontobel US Equity has consistently demonstrated above average performance with lower than average volatility over three to five years, which are the characteristics we need to see in a fund before we invest.

The fund has a large cap bias but is willing to run with a high active share. Dodge & Cox US Stock has a value style but against the backdrop of a growth market has delivered superior gains with lower volatility.

To continue to the full article, click here.

The full article was first published in Wealth Manager on 18 January 2018 | Eleanor Mahmoud



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