New Star fund of funds director Craig Heron says that after being heavily invested in emerging markets such as China and India, there are concerns that valuations are stretched.
Heron and head of multi-manager Mark Harris have held a 5 per cent weighting in the Imara African opportunities within their more aggressive tactical fund but have now introduced a 2 per cent position in its managed and balanced port-folios at the expense of China.
The team has also introduced a 5 per cent exposure to Neptune Russia and Greater Russia across the funds as well as investing in the Marshall Spectrum CSI value fund, a hedge fund investing in Russian smaller companies.
Heron says: “Africa from resources and domestic consumption growth angles looks attractive but we are unlikely to go higher due to liquidity concerns. Russia is the least liked of the Brics due to political concerns but there is lots of valuation support.”