City Financial multi-manager Mark Harris has returned to the £470m Prusik Asian Equity Income fund, a fund he originally held while at Eden Financial.
Harris chose the Dublin-domiciled fund after its equity income manager Tom Naughton increased exposure to cheap Chinese equities.
The fund has replaced the £1.4bn Schroders International Selection Asian Total Return fund which Harris still has exposure to elsewhere in his portfolio. Harris says the fund, co-managed by Robin Parbrook and Lee King Fuei, may be replaced further due to the fund’s beta aspect.
Charles Stanley Direct head of research investment Ben Yearsley praises the Schroders fund but sees this move as a risk-focused decision.
Yearsley says: “You are upping the risk in your portfolio if you are going from total return to equity income so he is changing his risk profile.
“In a rising market, funds like the Schroders International Selection Asian Total Return fund will be left behind. It depends on the environment you think you are in.”
In terms of valuations, Harris says he sees attractive prices in relative basic resources, with a number of pricing metrics showing these as cheap compared to defensive areas.
But he has decided against upping exposure to this area and instead positioned his portfolio to be slightly more defensive. This is due to market uncertainty, partly created by the Federal Reserve’s talk of tapering its quantitative easing programme.
Harris says: “I have increased cash a little bit in the short term and I have put some option protection on the portfolios, equivalent to 7 per cent.”
City Financial acquired the asset management arm of Eden Financial in October 2012.