Thames River Multi-Capital is wary of last year’s best-performing sectors.
The firm highlights the gulf between returns last year from gilts and global emerging markets. In the year to December 30, 2011, the IMA global emerging markets sector lost 19.2 per cent. The IMA UK gilt and IMA UK index-linked gilt sectors were up by 15.3 per cent and 21.8 per cent respectively over the same period.
Thames River believes this is unlikely to be repeated this year and warns against making investment decisions based on the past performance of a sector or asset class. In general, the team favours equities and thinks traditional safe havens may no longer be safe havens.
Co-head of multi-manager Gary Potter says: “We are broadly pro-equities. We look at what we pay for assets and what we might get back and, on that basis, equities look attractive.
“We are not calling the end of the gilt market, just that there is no value left so investors should look at other assets. Equities look to provide the best total return but investors have to be able to take the rough with the smooth.”