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AA-rated Smouha shines in multi-managers’ post-Brexit bets

AA-rated Smouha shines in multi-managers’ post-Brexit bets

The Brexit vote forced many leading UK multi-managers to substantially change positions in the immediate aftermath, with many ditching property and upping cash.

That is according to a report by fund distribution firm Harrington Cooper, which said property exposure fell from 4% in May to 2.24% in June, while investors piled into cash, with the average allocation rising by 2.84 percentage points.

In addition, UK-based multi-managers looked to reposition their fund manager exposure, with the biggest recipient of investor interest being Citywire AA-rated Anthony Smouha’s GAM Star Credit Opportunities.

The Geneva-based fixed income fund manager knocked the M&G Property Portfolio off the top spot of most-commonly held funds among leading UK multi-managers, and discretionary managers during the month of June.

Fund Fund manager
GAM Star Credit Opportunities Anthony Smouha
BlackRock European Dynamic Alister Hibbert
Henderson Strategic Bond John Pattullo & Jenna Barnard
Henderson UK Absolute Return Luke Newman & Ben Wallace
Hermes Asia Ex Japan Jonathan Pines
Polar Capital Global Insurance Nick Martin

Other funds in the top six included BlackRock’s A-rated Alister Hibbert’s BlackRock European Dynamic fund, while the Henderson Strategic Bond fund, which is co-managed by Jenna Barnard and John Pattullo, also received strong support.

Their colleagues running the Henderson UK Absolute Return fund, the AA-rated duo Luke Newman and Ben Wallace, also attracted attention, while the soft-closed Hermes Asia Ex Japan fund managed by AAA-rated Jonathan Pines was also popular. This was as well as the Polar Capital Global Insurance fund, which is run by Citywire A-rated Nick Martin.

The research tool tracks the asset allocation of 32 multi-manager funds and model portfolios that follow a balanced risk profile. The total value of the funds’ assets totalled €12.73 billion, although the multi-managers and discretionary managers followed looked after a total assets of more than €229.76 billion.

Positioning plays

In terms of overall allocation, there was a continued decrease in equity investment, as allocations to European equities fell by 1.41% in June. This is while investment grade bonds also fell by 1.23% during the month. Overall, the average exposure to bonds stood at 22.99% down 0.54% in comparison to May.

Gilts accounted for only 2.06% of portfolios, while allocations to high yield increased slightly. Sovereign bonds saw the largest decrease (-0.8%) on a quarterly basis, with non-investment grade bonds (+0.7%) being beneficiary.

Looking specifically before and after the Brexit vote, allocation to fixed income as a whole decreased by 0.54%, with the most significant reduction seen in investment grade, which dropped 1.2% month-on-month.

As for country allocations, based on a quarterly basis the average US equity exposure rose in June by 0.29%, this being the first gain in six quarters. Whereas average equity exposure reduced by 1.8% driven by a reduction of 1.1% to European equity and a 0.7% reduction in both Japanese and global equity.

Asia ex-Japan markets shone through as being preferable, to Japan with an average allocation in portfolios now sitting at 5.5% compared to 4.41% for Japan. The Japanese market saw its average allocation peak in March 2015 and has continuously declined since then.

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John Pattullo
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23/50 in Bonds - Sterling Strategic Bond (Performance over 3 years) Average Total Return: 11.73%
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1/50 in Bonds - Sterling Strategic Bond (Performance over 3 years) Average Total Return: 29.66%
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60/139 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 8.90%
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59/139 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 8.90%
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14/89 in Equity - Europe Excluding UK (Performance over 3 years) Average Total Return: 34.85%
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22/68 in Equity - Banks & Financials (Performance over 3 years) Average Total Return: 50.33%
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5/228 in Equity - Asia Pacific Excluding Japan (Performance over 3 years) Average Total Return: 61.99%
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