The Cazenove Capital multi-manager team at Schroders has started to tilt their portfolios towards mid-recovery equities after noting the business cycle has turned.
The team, which uses Cazenove’s business-cycle process to avoid falling victim to a permanent style bias, has been focused on early cyclical risk for the past 18 months, through holdings such as Sanjeev Shah’s Fidelity Special Situations and Bill Miller’s Legg Mason Opportunity funds.
Cazenove says these holdings have worked “fantastically well” over the past 18 months, after markets rose when investors realised they would be rewarded for taking risk and poured more money into stockmarkets.
Cazenove multi-manager Joe Le Jehan says: “What we have tried to start doing is rotate into some mid to late cycle stuff. A couple of months ago we started adding a bit to resources, be that general resources equity, gold equity or holdings like JPM Natural Resources.
“Now we have started to think about moving some of our other names. We have been chipping away a bit at Fidelity Special Sits and adding to things like Jeremy Lang’s Ardevora UK Income, which is a bit more mid-cycle focused.”
Le Jehan adds the Cazenove multi-manager team is not ready to return to more defensive holdings in the current cycle and is holding cash as a defence against a possible market.
Bestinvest managing director Jason Hollands says: “The move by the Cazenove multi-manager team into Ardevora UK Equity Income is a good endorsement for ex-Liontrust managers Jeremy Lang and William Pattisson, who set up their new boutique a couple of years ago.
“Ardevora is still well below the radar of most advisers, however the numbers being delivered so far on their UK funds have been exceptionally good.”