At December 31, equities made up almost 48 per cent of the portfolio as the asset class ended the year on a high. Apollo says, for most regions, equities produced the best returns of 2010 in December and not one IMA sector delivered negative returns over the month.
The firm says this optimism prompted the increase in equities to 47.62 per cent from just over 41 per cent at the end of November. But the firm is continuing to use a multi-asset approach to curb volatility and believes this strategy helped the fund and the Apollo cautious fund of funds to produce positive returns last year. As at December 31, Apollo balanced was up 9 per cent over the year and Apollo cautious was up 7.54 per cent.
Last year Apollo predicted that it would not be a good time to sit in cash and it stands by that view for 2011. It says the sovereign debt problem still remains but could disappear if inflation was allowed to creep in, but this would give rise to different concerns.
Apollo partner and fund manager Steve Brann says: “Debt worries, defaults, inflation, weak growth, strong growth, take your pick, they will probably all crop up again and worry investors in different ways. But as ever, we will do our best to cut through the volatility and deliver smooth positive returns.”