MAM Funds CF Miton strategic portfolio manager Martin Gray is focusing on sustainable yield across equities, bonds and property.
Gray is taking a defensive position due to global economic concerns, including uncertainty around quantitative easing, problems in the eurozone and US unemployment.
He feels emerging market assets look unattractive due to rising inflation in emerging regions, on the back of spiralling food and energy prices and wage increases. Demand in developed countries for products made in the emerging economies is also slowing.
Gray says a world economic slowdown is not good for risk assets such as equities, which he thinks look overpriced. Assets that provide sustainable yields are attractive against this backdrop as investors can still benefit from the income, even if prices fall.
Gray has started playing out this theme by gaining exposure to the bigger global companies on the FTSE 100. He holds the Invesco strategic income fund, managed by Mark Barnett, who favours big companies in the pharmaceuticals, telecommunications, tobacco and utilities sectors.