The managers of L&G Multi Manager Growth adopt a flexible approach to allocation so they can exploit opportunities as they arise, although emerging markets are a longer-term play.
Fund managers who are open-minded and “fleet of foot” can prosper in the uncertain macroeconomic environment, says Alan Thein, a co-manager on the £270m Legal & General (L&G) Multi Manager Growth portfolio. Thein, who co-founded the L&G multi-manager boutique with Tim Gardner in April 2008, expects markets to remain volatile and says investors should act quickly when they spot opportunities.
“What we’ve seen over the last two-and-a-half years is that you’ve got to be nimble to take advantage of anomalies you see in the markets,” Thein says. “You can’t be dogmatic. If you’ve got a view today, be prepared to challenge it – be prepared to change it. In these markets a buy-and-hold strategy is probably very dangerous.”
Thein added Investec Global Gold to the Growth portfolio in October – a 4% allocation to take advantage of value in gold mining shares, and to counter concerns over currency debasement by governments. “One of the things governments can’t do is get their hands on and abuse the supply of gold,” Thein adds. (article continues below)
He also increased exposure to energy stocks, through Guinness Global Energy – a $130m (£80m) Irish-domiciled Oeic investing in companies engaged in the exploration, production or distribution of oil, natural gas, coal, nuclear and alternative energy. Guinness Global Energy has featured in Multi Manager Growth since 2008, and formed about 6% of the portfolio at the end of October.
In developed markets, concerns over debt levels and banks prompted Thein to focus on defensive, equity income strategies. He sold his stake in River & Mercantile UK Unconstrained in October, and increased his weighting to Invesco Perpetual Income. Thein also introduced Veritas Global Equity Income to the portfolio. The fund, a 4% allocation, invests in a selection of 25-40 income-generating stocks.
Thein also holds GLG Alpha Select – a Ucits III British equity long/short fund run by John White. Thein says its strategy of investing in large cap, liquid stocks is attractive, and he supported the decision to close it to new investment when it hit £200 billion in assets under management. “We hate funds that do long/short, start at £500m or £1 billion and end up running £10 billion,” he adds.
Performance of the Growth portfolio has been above average over the past year, with a return of 14% compared with a (fund of funds only) sector return of 13%, according to Morningstar. Thein says he is happy with the performance of the L&G range. “We’ve had three decades of markets compressed into two-and-a-half years,” he adds. “To come out of that with solid numbers gives us a great base.”