Head of multi-manager Tony Lanning says the active, balanced and cautious multi-manager funds remain underweight in UK equities and attributes relative outperformance over the last 12 months to this and underweight positions in Europe.
The balanced mandate has a 30 per cent holding in the UK against a peer benchmark of 36 per cent while European exposure is 7 per cent against 11 per cent. The active fund was top-decile for the 12-month period to March 31, falling by 17 per cent against a sector average of 25 per cent. The balanced mandate just missed out on a top-quartile ranking.
Lanning says: “As we have just begun to get a little bit more confidence in markets, instead of materially increasing our overall weighting to the UK, we have increased our cyclicality. We are still underweight in the UK. Our view is there are still significant headwinds to come.”
Lanning’s preferred overseas market in 2008 and this year is the US. “We have always maintained the US was doing more to ensure against a depression/deep recession,” he says.