Miton Asset Management multi-manager Martin Gray says he to keep a large weighting in cash as he admits he is “struggling” to find good value in the market.
Gray, who is holding 25.50 per cent of the £870m Miton Special Situations Portfolio in cash, says: “We are struggling to find value out there in anything. With all this new money coming into the market it is easy to see asset prices going up.
“I am very comfortable to hold cash. As soon as you move away from cash you are taking on risk for your investors.”
Gray, who co-manages the fund with James Sullivan, holds the cash in the US dollar and ‘quasi’ dollar formats, such as Asian currencies.
He adds: “We have owned a lot of cash for years, I am not afraid to hold it. We are not ducking in and out of cash, I just feel most risk assets look pretty fully valued.”
Separately, Gray has trimmed exposure to the pharmaceutical sector and UK real estate investment trusts, as he believes valuations were getting ahead of themselves.
EA Financial Solutions owner Minesh Patel is sceptical of such a weighty cash holding.
He says: “I think this weighting in cash is a bit heavy. Obviously Gray feels there will be a correction in equity prices. The market ebbs and flows and he is looking for the ebbs.
“I am not convinced. I think it will have an impact on performance if he keeps holding that much cash. But I can see his point as what active managers look for is pricing opportunity and the market is more expensive that it has been.”