Architas investment manager Nathan Sweeney has taken a 5 per cent position in the £143m Ardevora UK Equity fund.
Sweeney, who manages the £147m Architas UK Multimanager fund, says he made the shift after the prolonged bull run in equities made it harder to distinguish between stocks.
Sweeney chose the Ardevora fund because of its manager, Jeremy Lang, who he says has a reputation for thinking “outside of the box”.
Sweeney says: “This period requires a skilful manager who can exploit the opportunities, differentiating between quality and making money from the weaker names.
“An illustration of Lang’s investment process is his focus on behavioural finance, which he applys to his understanding of how managers allocate capital.
“They look for clues in the managements’ language, identify any behavioural biases and objectively compare them against hard facts.”
Architas made the allocation by reducing exposure to large-cap stocks and rotating into long/short and small-cap stocks.
Hargreaves Lansdown senior investment manager Adrian Lowcock agrees Lang has a different investment style and sees the merit of Sweeney having exposure to this.
Lowcock says: “The guys at Ardevora do things slightly differently and certainly have a distinct style. They monitor behaviour, of both investors and the people at the companies, and this figures highly in their process.
“So they have a behavioural philosophy where they look for where markets could go wrong. This could add a defensive element to the fund if markets get over-exuberant. Right now, I do not think markets are getting too excitable but this approach should help them for future corrections or when markets do get overheated.”