Thames River co-heads of multi-manager Gary Potter and Robert Burdett are set to continue adopting a cautious outlook on equities, preferring to hold higher levels of cash and other asset classes.
The pair, who joined Thames River from Credit Suisse last year, believe equity markets are likely to remain volatile for the foreseeable future with downside risk contained by expectation of further interest rate falls.
Potter and Burdett’s preference for the developing markets has also seen them reduce their exposure to developed nations, with Japan and the US favoured in the smaller quota above the UK and Europe.
They believe that there is value in the US markets with the aggressive policy from the Federal Reserve to stimulate the economy.
As for commodities, the pair believe prices are in line with events, given that the asset class has been bet on a decoupling demand from the developing markets, led by China and its demand for industrial raw materials.
The hope is that this bulk demand will continue if there is a major slowdown in the US.