Rathbones’s David Coombs has reshuffled his US equity exposure after buying into a fund in which its managers actively engage with the companies they invest in.
Mr Coombs said he had wanted to maintain his overweight to the US, but his focus on targeting funds that employed a “value” strategy by seeking out unloved or undervalued stocks had not worked – in part because of the market’s huge post-crisis rise.
“We have had to reappraise our positions in US traditional value strategies as those managers have underperformed for some time,” he said.
“Traditional low price-to-earnings and price-to-book metrics have not been working due to their greater exposure to overseas earnings. So the strength of the dollar has been a further headwind.”
Mr Coombs said his strategy had “evolved” to consider managers who actively worked with the businesses they invested in to help those companies realise untapped potential.
The manager has bought into the Dublin-based Cramer Rosenthal McGlynn US Opportunities fund for his three vehicles.
He said the managers of that fund called themselves “constructivists”, meaning they engaged in dialogue with underlying businesses and looked for “catalysts to unlock that all-important value”.
Mr Coombs said the fund had a five-year track record, but the strategy had been running for more than 10 years.
