TM Darwin founder David Jane has reduced his equities exposure to the lowest it has been since last summer due to concerns about further market volatility.
The £19m TM Darwin multi-asset fund has reduced equity exposure from 58 per cent to 50 per cent over the last six weeks. Cash is currently 14 per cent in the fund. The equities weighting reduced to 48 per cent last summer.
He says: “I do not want to have too much risk in the fund. There is uncertainty around the US elections and the growth of Western economies. Asking China to pull us out of a recession is a bit much to ask. We still have not got any answers in terms of the eurozone crisis. We had the wonderful speech from Draghi in July, with him saying the European Central Bank would do whatever it takes to preserve the euro, but there is no tangible action to hold onto.”
Jane has been selling high risk, cyclical stocks that have rallied recently, but tend to fall hard during times of market volatility. He has trimmed his position in home retailer Home Depot, railroad provider Kansas City Southern and hotel chain InterContinental Hotels Group.
Whitechurch Securities managing director Gavin Haynes says: “Equities continue to be our favourite asset class over the medium to long-term. However, the UK market has rallied 10 per cent since June based on little news flow.
“It is difficult to see much short-term upside from here. Given the potential headwinds, scaling back equity exposure at this point could prove to be a sensible tactical move.”