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Potter says funds turned into closet trackers to boost returns

Thames River co-head of multimanager Gary Potter says a number of funds became closet index trackers last year to produce strong returns.

Potter says a number of managers made the call to lower their exposure to financials and increase their exposure to commodities.

He says: “There are times when following the market is the right call but we feel there are more humps in the road and that will suit stockpickers.

A number of the funds that topped the performance tables in the past six months will not be there going forward.”

Potter says 2010 is likely to favour traditional stockpickers in general, highlighting figures such as Jupiter’s Philip Gibbs, Artemis’ Derek Stuart
and Old Mutual’s Luke Kerr.

He says: “When the horizon becomes clearer in 2010, we will see an increased difference between those fund managers who are good and those who are lucky.”

Potter says he would not be surprised if the FTSE rallied as high as 5,700 or 5,800 but says he would not raise his eyebrows if the index was at the same level it is now in 12 months time.

He says: “The recent success for markets has largely been on the back of commodity funds and we will need to see success broaden out to other sectors for it to continue.”

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