Harder to call difference between markets - Burdett

Mr Burdett, who co-manages Thames River Global Boutiques, Thames River Cautious Managed, Thames River Distribution, Thames River Balanced Managed and Thames River Equity Managed, said he expected the difference in returns from major markets such as Japan, Europe and the UK to narrow.

He said it was harder to call any difference in those markets.

Mr Burdett said: "The markets are at a very delicate point. Some of the technical analysts are getting very twitchy that we are due another lurch down. Then there are of course more calls from people like Anthony Bolton [of Fidelity International] that this is the beginning of the bull market and returns are typically front-end weighted in these scenarios.

"There is a view that we are due a pause following the market rise. It is quite difficult to call the short-term direction of the markets at the moment, which is why we have allocated more to people with the ability to structure their funds with a bit of flexibility in the next few months."

At the end of last year Mr Burdett predicted a severe recession and re-positioned the multi-manager funds very defensively.

He said the five funds were far less defensively positioned today.

Mr Burdett said: "We were rather lucky with our timing. It was pretty clear earlier this year that some of the key risks to the financial system had abated. A key point for us was the G20, where the collaboration between nations was maintained.

"Also at the G20 there was a commitment to help the International Monetary Fund help bail out emerging markets if they got into trouble. That was very important."

On average, Mr Burdett said the cash position of the five funds was now around 5 per cent compared with around 30 per cent at the end of last year.

In terms of continuing to be defensive, Mr Burdett said the funds still had a high allocation to absolute return funds compared with most of their competitors and this was now how they were positioned for any possible downturn.

One such fund is Polar Capital UK Absolute Return fund, managed by Phil Hardy. Mr Burdett has increased the funds weighting in Mr Hardy's offering.

The UK Absolute Return fund was launched in June last year with the aim of delivering positive absolute returns regardless of UK stock market conditions by fully utilising the wider investment powers permitted under Ucits III regulations.

Mr Burdett said: "He [Mr Hardy] is very willing to change his mind in market conditions where there is short-term volatility. Someone like him can help us through market volatility as much as the other managers we are using."

Damien Paterson, managing director of Glasgow-based Paterson Financial Planning, said: "What I have found in the last two or three years is that I have moved to non-correlated investments as part of people's portfolios. It formed a small part before, but it is becoming an increasing part of people's portfolios because they are worried about the overall market, but also because it is difficult to get overall balance to their portfolio because each area tends to pretty much do the same because fiscal stimulus across the globe has been pretty much the same."