Premier Asset Management’s multi-asset growth and multi-asset income and growth funds have had a good start to the year, ranking first and second out of 158 funds in the mixed investment 40-85 per cent shares sector during the first quarter.
The firm attributes performance to its asset allocation calls, fund selection and not panic selling out of good investments during last year’s lows.
Fund manager David Hambidge invests in areas of the market that are not crowded. He sees the most value in Japan and Europe but says value alone is not a good enough reason to invest. There has to be a catalyst for positive changes that will reward investors for their patience.
Japan is well known for its false dawns but Hambidge is optimistic on a three to five-year view. He says Japanese markets are cheap but there needs to be a catalyst for a re-rating in the form of a weaker yen. This should happen as a result of the Bank of Japan’s 1 per cent inflation target, which recently helped the region’s export-dominated equity market to rally.
Hambidge is hedging his Japanese exposure back to sterling as returns would otherwise be diluted by local currency weakness. He raised his Japanese weighting by 1.5 per cent in the first quarter, at the expense of his European allocation, but thinks there are still plenty of opportunities in Europe.
He says: “The eurozone is a mess but Europe houses many world-class companies. We want to be there for the recovery, even if it means taking a bit of pain now.”