Deutsche Asset Management’s Thomas Schüssler is maintaining the high cash levels he introduced into €19 billion equity income fund as he still struggles to find viable investments.
Schüssler said he is still struggling to find adequate areas to make meaningful investments, despite increasing energy, financials and IT exposure in December 2017. However, he said this was countered by cutting exposure in utilities, consumer staples and telecoms.
‘We have kept our cash position and the investment exposure in fund stable,’ he said. ‘Overall, our current cash level is still relatively high - around 10% including bonds which we use as a cash substitute - and we are waiting for further opportunities to increase our investment level.’
At present, consumer staples is the biggest sector bet at 21%, while healthcare accounts for 12.2% and telecoms makes up 11.9%. At a stock level, Schüssler has Taiwan Semiconductor as the biggest single exposure at 4%.
Schüssler first adopted a heightened cash exposure due to concerns over global growth in 2017 and uncertainty driven by the appointment of Donald Trump as US President. Over the past year, his exposure to the US market has fallen from 40.9% to 35.7%.
Looking into the year ahead, Schüssler said he expects limited risk for an economic downturn but said valuations remain relatively high. Therefore, he anticipates only marginal returns in the low to mid-single digit range for global equities.
‘Consequently, the importance of dividend payments for the total return is presumed to increase further and their contribution to the return of the investment to be above average.’
The DWS Top Dividende fund returned 20.8% in US dollar terms over the three years to the end of December 2017. This compares to a 32.6% rise by its Citywire-assigned benchmark, the MSCI World TR USD, over the same timeframe.