Multi-asset managers are divided over whether they should maintain their cash weightings in response to market volatility or if it presents an opportunity to buy cheap equities.
MAM fund manager Martin Gray has reduced his funds’ cash weightings to take advantage of increased value in the equity market. In July, he held a defensive strategy on his £648.3m special situations and £196.8m strategic growth funds, with 36 per cent and 37 per cent cash holdings respectively.
This month, Gray reduced his cash holdings in both funds by 8 per cent and invested 5 per cent into UK large-cap equities and 3 per cent in Asian largecap equities.
He says he is still avoiding financials and commodity-related stocks.
Gray says: “I have been adding to equities because there is more value in the market now than earlier in the year, when it was valued 10 to 15 per cent higher.”
But Baring Asset Management head of multi-asset Percival Stanion has held his cash position across the firm’s multi-asset range. He says: “We do not think the markets have moved to fully discount the possibility of a renewed recession.”