Brann takes a short position on FTSE 100

The manager, who runs both the £56.2m IFDS Apollo Multi-Asset Cautious and £66.6m IFDS Apollo Multi-Asset Balanced funds with Tom McGrath, Craig Wetton and Ian Willings, said the move was aimed at capturing any downside in the market without having to sell positions he favours.

“Having got off to such a blistering start [in 2012], we felt it prudent to ease back on the throttle and rather than sell holdings we are comfortable with. We decided it would be more efficient to hedge by taking a short position on the FTSE 100,” he said.

The move has taken the Cautious fund’s net equity exposure below 30 per cent and to 41.1 per cent for Balanced.

Mr Brann said the funds had a strong January, gaining as “the Santa Claus rally of 2011 continued into 2012”. Cautious rose by 2.4 per cent in the month and Balanced rose by 3.9 per cent – both outperforming the FTSE 100 index’s 2 per cent gain.

“What is more pleasing, is that many of our holdings which we believe to contain deep embedded value are starting to deliver,” he said.

In Cautious, these include Utilico, a closed-end Bermuda-based fund, which rose 11.9 per cent in January, and the Impax Asian Environmental fund, which is up 9.3 per cent.

Mr Brann also highlighted the Odey UK Absolute Return fund and the £922m Schroder ISF Asian Total Return as strong performers.

In Balanced, he said Baker Steel Natural Resources was the strongest performer, up 34.6 per cent.

The £1.6bn Thames River Global Bond fund – managed by Paul Thursby and Peter Geikie-Cobb – fell 1.4 per cent during the month, partly owing to weakness in the dollar.

According to Mr Brann, the F&C Private Equity investment trust also “slipped further onto a ridiculous discount” with a share price fall of 3.8 per cent.