Peter Ewins has sold down his exposure to the UK and upped holdings in the ‘rest of the world’ segment of his investment trust portfolio.
The manager of the £448.5m F&C Global Smaller Companies trust said while he did not seek to make “really large asset allocation changes on the back of short-term developments” it was “always tempting” to add to a region which had been out of favour.
“Late in the year we did start to add to our rest of the world exposure at the expense of the UK,” he said. “This is essentially a relative valuation call.”
The manager allocates directly to the UK, Europe and North America, but uses funds to access Japan and the ‘rest of the world’.
The manager said the main change was a switch from an Asian fund managed by Allianz to one run by Canadian manager Manulife.
“We have been impressed by the track record of Manulife’s Asian small-cap fund, which is backed up by a high level of analyst and fund management resource based in the region,” Mr Ewins said.
Towards the end of the trust’s financial year to April 30 he topped up the three largest ‘rest of the world’ holdings.
“We feel the valuation argument looks relatively favourable for the markets, and are hopeful that economic recovery in the developed world will help to support the emerging markets,” he said.
“The main concerns for us near term are two-fold. Firstly there is political uncertainty in many countries, with important elections still to come in Indonesia and Thailand following on from the recent one on India.
“The second concern is around the poor prevailing flow of data from the Chinese economy, and fears that we will see a large jump in bad debts in the banking and so-called shadow banking market as the real estate market corrects and general manufacturing cools.”
