Jason Britton at T Bailey Growth acknowledges multi-manager errors over the 2008 financial crisis and declares a strategy of caution to avoid mistakes in the wake of the disaster in Japan.
With the long-term human and economic impact of the disaster still unclear, Britton says: “What we often do during events such as this is not very much. If you react too swiftly to a crisis it is a mistake which can result in you ending up on the wrong side of the ups and downs”.
There are further examples of these contrarian calls affecting the fund’s direction. Despite the Middle East crisis and fears of a Chinese bubble the T Bailey Growth fund is likely to continue to hold emerging market funds through 2011. Britton says he may even increase his emerging markets position when the opportunity arises.
The T Bailey Growth fund has maintained an overweight position in British equities over the past two years. Holdings include the Standard Life UK Equity Recovery fund, and BlackRock UK Equity fund.
But Britton says the weighting could be reduced if he decides that a bigger move back towards emerging markets is needed. He adds that tough decisions would be made “sympathetically, but pragmatically”.
It can be a complicated task for a global fund of funds manager to keep up-to-date with events in several markets around the world at the same time.
It is for this reason that TBailey Growth holds several exchange traded funds (ETFs), including the fund’s top holding, the iShares S&P 500 ETF.