Citywire A-rated David Fishwick has increased equity exposure in his global macro fund in response to increased volatility seen over the first few months of the year.
Fishwick upped equities from around ‘high 30s’ to over 60% exposure over the end of 2015 and into 2016 before increasing this to 70% in the M&G Episode Macro fund over the last month.
The move had seen Fishwick and co-manager Eric Lonergan move into mining stocks as well, as the duo sough to capitalise on depressed valuations and increasingly attractive entry points.
‘The equity weight from high 30s to low 60% and included some mining equity, which went up 25% in a very short space of time and we removed a large portion of that. But, the equity exposure as a whole went up to 70%.’
Elsewhere in the fund, which invests across equities, bonds, currencies and derivatives, Fishwick adjusted the bond exposure from being long on long-dated government bonds to shorting the front-end of the US curve.
‘When government bonds in the US rallied in January we removed that exposure and opened a short position in US five-years to the tune of 150% of NAV. So there has been a meaningful shift in the risk characteristics portfolio to be long equity, short bonds much more aggressively, which again is highly tactical given the steep rally we saw in US five-years.’
The equity exposure is spread through the UK, Europe, US and Japan, while the short positions are focused on the US government bond market. It currently holds zero exposure to corporate bonds, convertible bonds or property funds.
On a three-year basis to the end of January 2016, the M&G Episode Macro fund returned 15% in euro terms, while the average manager in the Alt Ucits – Global Macro sector returned 2.7% over the same timeframe.
A more in-depth interview with David Fishwick is set to appear in the April edition of Citywire Selector magazine.