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FE Adviser Fund Index

As we close in on the next rebalancing of the three Adviser Fund Indices, panellists are considering what changes, if any, they want to make.

Whitechurch Securities head of research and AFI panellist Ben Willis says he does not tend to make too many changes to his AFI funds. In his AFI aggressive portfolio, he has exposure to Japan, which has been painful at times but he has maintained this allocation and it is finally starting to bear fruit since the last rebalancing.

He says: “I have also got Baring German growth, which got hammered last summer but is now doing well. In aggressive, we tend to look for equity opportunities, thematically or regionally. We have got global energy, infrastructure and commodity plays, counterbalanced with other areas. That portfolio is quite speculative and we are happy to let those run.”

In the balanced and cautious portfolios, Willis adopts a more controlled asset allocation approach. He says: “In balanced, we have got a couple of bond funds that we are pretty happy with, an emerging market debt fund and Jupiter strategic bond. We might keep those and maybe add Kames Capital high yield.”

He is also considering replacing Allianz RCM Bric stars with a more broad-based global emerging markets fund.

Willis says: “In cautious, we have got quite a good mix. There is a bit of property. We are negative on property but during market weakness it flatlines and defends really well. Artemis strategic assets is in there and we will maybe add another bond fund. The rest is in income funds. There is quite a good opportunity from a yield point of view in high yield, so we will make the odd tweak but we will have to wait and see at the new rebalancing date.”

Rowan Dartington head of collectives research Tim Cockerill says there is a big focus on yields. For this reason he holds a number of funds with defensive characteristics, such as JOHCM UK opportunities, run by John Wood, and Harry Nimmo’s Standard Life UK smaller companies.

Cockerill also remains comfortable with his level of exposure to Asia and emerging markets, as well as Europe, which he accesses via Jupiter. He says: “I do not want to make changes for the sake of it. It is tempting to tinker but I have always been quite long-term-focused.”

Cockerill’s AFI portfolios have outperformed the firm’s other funds of late, meaning fiddling around the edges is not always productive. He says each of his AFI portfolios combines defensive characteristics with other opportunities.

Only rebalancing every six months does force a buy and hold mindset but this is an approach Willis says he already adopts. He says: “With six-month rebalancing, you can tweak but we would not make wholesale changes. More often than not, you are looking for long-term themes in speculative areas and to ride the volatility.”

Data supplied by FE


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