M&G’s Jamie Horvat has doubled the cash weighting in the £1.8bn Global Basics fund and initiated a position in precious metals since taking over as lead manager at the end of last year.
Horvat assumed the role of lead manager from Randeep Somel in December, with Somel remaining as co-manager. Somel had been running the fund since his predecessor Graham French left the firm in December 2013.
Horvat has since trimmed several of the fund’s large-cap positions that have “significantly outperformed” and raised the cash level from 2.5 per cent to 5 per cent in order to take advantage of the market volatility this year.
He has also been protecting the portfolio against tail risk by investing in precious metals companies such as Franco-Nevada and Newmont.
Horvat says: “We have added precious metals for portfolio insurance. We now have a 5.5 per cent weighting in precious metals; previously it was 0.”
Prior to Horvat assuming control, the fund was essentially a large-cap portfolio, he says, but Horvat – who takes an all-cap approach – has been buying into global mid-cap stocks recently and continues to add to them. These include two healthcare companies and a private banking firm.
Horvat says: “These are active positions. We now have 15 per cent in small and mid-cap stock. Historically in the funds I have run I have held a third each in small, mid and large caps, so this fund could potentially go that way, but it is predicated on valuations.”
The fund was £6.7bn four years ago but saw its assets fall to £4.3bn when French stepped down after a spate of poor performance, and was hit by redemptions in the wake of French’s departure. Now at £1.8bn, Horvat says flows have stabilised.
Over one year the fund has fallen 11.6 per cent against the 9 per cent fall in the IA Global sector, FE data shows.