Heartwood Wealth Management offers strategies it uses in its private client portfolios to all investors via its Balanced Managed Multi Asset fund, which holds three exchange traded funds.
Heartwood’s range of multi-manager funds aim to bring the group’s management style to a wider market.
Scott Ingham, the investment director at Heartwood Wealth Management and manager of the CF Heartwood Balanced Multi Asset fund, says the concept was to give investors access to the same strategies employed in the group’s private client portfolios.
“In these funds we’re trying to offer access to the same unconstrained style as we run for our private clients,” he says. (article continues below)
The strategy employed in the Balanced Multi Asset fund follows a top-down, cyclically led approach with the manager able to invest across both a range of asset classes and a variety of financial products.
In these market conditions, however, the manager has been pulling some of his risk exposure off the table. The fund’s emerging markets weighting has been brought down in favour of global growth strategies with a bias towards large-cap multinational companies.
“On a long-term structural basis we have a bias towards emerging markets but that doesn’t stop us reducing our exposure dramatically at any one point if we think the outlook justifies it,” says Ingham. “We’ve achieved good returns from some of these positions but sometimes it’s better to get out early before you get burned.”
An example of this was the fund’s allocation to China, which was reduced sharply at the start of the year over concerns of imminent tightening measures by the Chinese government to help cool inflation fears.
On the fixed income side the return of high levels of volatility in the market has driven Ingham’s focus away from high-yield and onto quality. The market’s push into gilts as a haven, however, meant the fund was punished in June for its underweight position in British government bonds.
“It looks like investors are still looking for yield and a safe haven, but yields are unusually low at the moment,” he says. “We do feel a little exposed having so little in government bonds but we don’t want to be buying in at these levels.”
Since its launch in April the fund has fallen 3.78% against an average drop of 2.66% from the Investment Management Association Balanced Managed sector.