Asset Classes
58-59
Contrarian: Gilts
With quantitative easing finally
drying up, the gilt markets lost
their biggest stimulus, with around
£200bn having been pumped into
the market. Ashcourt Rowan’s Tim
Cockerill argues that while the outlook
is for gilt yields to rise, there are
equally good reasons why investors
should question and challenge this
consensus view and should not
ignore gilts altogether
A distorted view
Have this month’s UK inflation figures set a new
precedent, or is it too early to tell?
Just as the economy looks
to have begun to stabilise,
another threat, inflation,
comes along to mix
things up. Or has it? UK
inflation climbed to a 14month
high of 3.5% in
January, though whether
this is just a temporary blip
or a sign of worse to come
is debatable.
You cannot accuse
investors of being ignorant
to inflationary pressures;
intermediaries, fund managers
and economists alike
have been warning about
the return of inflation for
months now. But how can
portfolios be safeguarded
against this threat?
Gary Corcoran tackles
the subject in this month’s
Special Report (pages 21-
27) with focus on real
assets, while the topic is
also discussed in our Views
60-61
Equities:
UK mid-cap funds
UK mid-cap funds benefited greatly
from the post-March 2009 rally as
equity funds in general enjoyed a
reprieve from their downward spiral
of the previous year or more. This is
perhaps typical as we come out of
recession, and the easy money may
have been in the past 12 months, but
Gary Shepherd asserts that they are
still attractive now
62-63
Fixed income:
Corporate bonds
Corporate bonds were undoubtedly
the big winner of 2009, and they
still offer investors strong yield
opportunities today. The scope for
truly stunning returns may have
gone, but their risk-adjusted value
remains, while those who are looking
for a U-turn, argues Gary Shepherd,
are likely to be disappointed. The
sector is also showing strong
liquidity, should all investors want to
cash in their lot at the same time
Round-Up (page 12).
What is causing this
inflation? There are various
explanations but many
point towards China’s insatiable
appetite for commodities.
How equity
investors can benefit from
this country's inexorable
march to world domination
is not a question for
the faint-hearted, which is
why we went to Anthony
Bolton for answers. An
inclusive interview with the
old master, ahead of the
launch of Fidelity China
Special Situations, can be
found on pages 33-36.
China and its developing
market peers were also
under discussion at our
recent Portfolio Adviser
Emerging Markets Forum,
which included presentations
from experts
at BlackRock, Neptune,
Statistics
64-70
PA Quality Funds
This is a selection of some of the
top-tier funds available to high-end
UK-based investors. It includes on-
and offshore funds, passed through
a qualitative filter and a three-year
performance and volatility quantitative
filter. The funds that make it through
this process, which was designed in
conjunction with Morningstar, are put
into categories used by advisers to
create their fund shortlists
FEEDBACK
Pictet, Invesco Perpetual,
F&C and Macquarie (pages
16-18).
A rise in global inflation
may also trigger a growth
in interest in thematic
funds. Charles Stanley’s
Ross Brookes gives us the
lowdown on this sector
in Fund Selector (pages
43-46). We also take a
closer look at the fixed
income space with opportunities
in corporate bonds
(pages 62-63), and there
is a contrarian view on
the great unloved – gilts
(pages 58-59).
As always, please do
let us know your opinion
on any of these or other
topics that we will then
address for you in future
issues.
Gary Shepherd
Deputy editor
71
PA Quality Funds
of Hedge Funds
This is a list of the top 30 funds
of hedge funds, split by three different
quantitative processes. The three
categories are those with an equity net
long exposure, multi-strategy funds of
hedge funds and global macro funds.
They show their relative correlation
to equities and bonds as well as their
performance over the past 12 months
showing how they have fared in
a negative market environment
We are always looking to improve the magazine so if
you have any comments on what you have read, any
suggestions for new topics to be covered, or anything
you would like our investment panel to investigate for
you, please e-mail gary.corcoran@lastwordmedia.com
Please include your name, job title and company name.
We really appreciate any feedback
Portfolio Adviser
Investment Panel
FUND SELECTION
Matthew Butcher
divisional director,
Brewin Dolphin
Nick Sketch
senior investment
director, Rensburg
Sheppards
ASSET ALLOCATION
Mark Rushton
director,
Fortis Private
Banking
Gavin Haynes
investment
director,
Whitechurch
Securities
PORTFOLIO CONSTRUCTION
Tim Cockerill
head of research,
Ashcourt Rowan
Rick Eling
investment solutions
manager, Buckles
Investment Services
Nigel Cuming
chief investment
officer, Collins
Stewart
ECONOMICS
Peter Bickley
chief strategist, UK,
Deutsche Bank
PWM
Simon Ward
chief economist,
Henderson Global
Investors
HEDGE FUNDS
Brendan Campbell
vice president,
hedge fund
research,
Cheyne Capital
STRUCTURED PRODUCTS
Clive Moore
managing director,
Investment Design
and Distribution
MARCH 2010 [www.portfolio-adviser.com] PORTFOLIO ADVISER
5
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.