Fund manager’s diary

Aleem Siddiqui manages three Tactical Selective Passive unit trusts within the Close Discreationary Funds umbrealla. His diary runs from 29 October to November 2

FS Aleem Siddiqui Large

Monday Monday mornings are when the passives team get together to review the portfolio, making sure each individual position is performing in line with expectations. Having a morning dedicated to spending time as a team helps to catch up on each other’s projects but also provides a ‘sanity check’ on the portfolio exposures; going through each passive instrument is essential in these fast moving markets. After dealing with weekend emails and putting on trades to tilt the portfolio to a more conservative stance, I run into a meeting with one of our instrument providers who gives us an update on a new UK smart beta product they are thinking of launching. The product seems interesting with potential to be a good diversifier, but is still at its initial stages so we add it to our monitoring list. A quick lunch and the rest of the afternoon is taken up with research into global fixed income instruments as we are thinking of diversifying our allocations even further.

Tuesday A breakfast meeting with one of the largest exchange traded product houses provides a good overview of their product range and development pipeline. The industry seems to be catching up very quickly with the US where ETPs have been popular for some time. The new instruments seem to be centred around ‘tail risk’ (or ‘extreme event’) protection and gives me a few ideas. Back at the office, I sit down with a member of the team and we bounce a few thoughts around and decide on a way to test the idea. Looking through market research news, as well as economic data, tells us that large risks to the downside are still lingering so we deploy the new capital staying in line with our conservative tactical positioning, but change the mix of instruments to be slightly more nimble.  

Wednesday The morning is spent on a research conference call with a US political economist. We then complete a monitoring template for one of our instrument providers as we do every six months to make sure that they still meet our stringent due diligence criteria. I notice a few changes at this provider in the last six months so call up our contact to get a bit more information. Thankfully, it is all positive developments. At the Monday morning review, we identified a European equity instrument which seemed to be diverging from its benchmark. It seems that the instrument is delivering lower returns owing to lower-than-expected trading volumes so we decide to replace the instrument with a comparable one from a different provider we already have on our approved list. 

Thursday The morning is taken up with going through market research, news flow and collecting information on the new economic data releases. A quick meeting with Nancy Curtin, our CIO, to discuss the US election confirms the view that there will be short-term impact but volatility should subside down over the medium-term. The rest of the afternoon is spent preparing for the weekly multi-asset committee meeting tomorrow morning. Some of the other teams are also looking at using ETPs for gold allocation so we put together a comparison study of the available instruments.

Friday I present the paper on gold ETPs to the multi-asset committee. In the meeting, our independent risk manager points out that the wider sector benchmark is becoming rapidly more cautious so, after the meeting, I spend a bit of time with him to fully understand the benchmark’s exposures and changes. I then spend time talking with market makers and brokerage houses to get an idea of market flows and general market sentiment. Market sentiment can be a powerful short-term driver so getting regular updates is essential for our tactical positioning. Given the cautious sentiment, we increase our tactical gold holding slightly when allocating the new capital. I spend the afternoon going through due diligence on a new ETP provider and print out a few research papers to read over the weekend before heading out the door.