Multi-manager OPM has increased its worldwide fund’s exposure to emerging market equities and brought European equities into the portfolio.
It says it may seem brave to increase emerging market equit exposure as these have underperformed developed markets over the last three months but it believes they will deliver the rewards over the long term, so has bought the iShares Brazil ETF and iShares FTSE/Xinhua China 25 index fund.
OPM tends not to hold many ETFs and prefers to use them for positions that are potentially short-term. It says it may move out of ETFs into actively managed funds, depending on how emerging markets pan out. It has also put 5 per cent in ETF Securities physical gold to counterbalance its equity exposure.
ETFs provide greater flexibility for short-term trading than actively managed funds. They provide an alternative to potentially upsetting the manager of an actively managed fund by investing and quickly selling out of a fund. They keep costs down, as trading actively managed funds over the short term could easily build up trading costs that would hit returns.
OPM has added a new actively managed fund to its worldwide fund, the Artemis European opportunities fund. This fund is managed by Mark Page and Laurent Millet, who were recently recruited by Artemis from LV=Asset Management.
OPM fund manager Ross Henderson says: “We have not had any European equity exposure in the worldwide fund for a long time but we think the value is there.”