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Insinger stays on defensive

Insinger de Beaufort says it will maintain the defensive stance of its multi-manager income fund despite some of its peers in the cautious managed sector having a higher exposure to equities and high-yield bonds.

The firm says the Investment Management Association’s cautious managed sector is contradictory in some ways as it allows up to 60 per cent exposure to equities, which is relatively high for a cautious investor.

A cautious managed fund can also be exposed to structured products and high-yield bonds that provide equity-like returns and, in Insinger’s view, could have higher risks than cautious investors might think.

The income fund is Insinger’s best-performing multi-manager fund over the year to date. It holds a relatively high weighting of over 51 per cent in fixed income, with the remainder in equities.

Some funds in the cautious managed sector have exposure to sectors such as emerging markets but Insinger says it would not take on that level of risk.

Director Peter Fitzgerald says: “I would never want to dictate what people buying cautious managed funds should invest in but we have almost lost the sense of let the buyer beware.

“Due to the nature of the cautious managed sector, some of the funds currently at the bottom have substantial exposure to emerging markets, commodities, high yield and Asia but this only comes to light when there is a market correction.

“We have managed to deliver a positive return of over 1.5 per cent since May when other funds and multi-manager have lost money.”

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