James Sullivan ups exposure to equities

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James Sullivan ups exposure to equities

Multi-manager James Sullivan has taken advantage of falling stockmarkets to incrementally add to his equity exposure.

Since reaching a high of 7,103 in April, the FTSE 100 index has trended downwards towards 6,500 amid the ongoing crisis in Greece, which has sparked bouts of volatility across markets.

The crisis, alongside the violent movements in China’s stockmarket, has also weighed on bourses in Europe and Japan too.

Mr Sullivan, investment director at Coram Asset Management, said his most aggressive fund – Opportunities – now had 40 per cent in equities.

The manager said he was not “anti equity”, referring to his arguably lower exposure to equities than many of his peers, but wanted to add to the asset class when it became cheaper.

“The price-to-earnings multiples in some equity markets have drifted a touch lower over the past few weeks and subsequently we have committed a little more capital to ‘risk assets’ as a result,” he said.

Mr Sullivan said he had upped exposure to Ian Lance and Nick Purves’s £350m RWC Enhanced Income fund within his Defensive fund, which also now has a higher weighting to Japan via a passive exchange-traded fund.

He said he had also added the Asian Total Return investment trust, run by Schroders’ Robin Parbrook and King Fuei Lee, to his Opportunities fund alongside the CF Woodford Equity Income fund, run by the Oxford-based Neil Woodford.

“We are mindful not to jockey positions in and out too regularly as it is not always efficient to do so, but when we lose the best part of 500 points off the FTSE 100 [index], as an example, it would perhaps be rather foolish not to.”

In terms of his bond exposure, Mr Sullivan said he was focused on short-dated debt, which would be less affected by an interest rate rise, something he added was growing ever more likely and was corrosive to bond returns.

But the manager said he had added to the Liontrust GF Global Strategic Bond fund, run by Michael Mabbutt, thanks to the exposure it offered to emerging markets.

“If ever there was a time to make money from ‘doing something different’ in bond markets, perhaps now is the time,” he said.

“A handful of [emerging market] economies are already pricing in a near doomsday scenario so the risks to the downside are arguably lower here than in investment grade.

“I can’t promise that this fund will deliver, but we think it pairs nicely with our conservative ultra-short bond investments,” added Mr Sullivan.