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Insight Investment multi-asset managers Patrick Armstrong and Ana Cukic have put more money to work in the soft commodities space, increasing their exposure to live cattle.

Adding a fresh ETF Securities Livestock tracker, which follows the Dow Jones AIG Livestock index, and topping up an existing swap against the Merrill Lynch Livestock index, Mr Armstrong and Ms Cukic have raised exposure to account for 5 per cent of the £302.4m Diversified Target Return fund and 4 per cent of the £173.3m Diversified Dynamic Return fund.

Mr Armstrong said cattle prices were benefiting from the J-curve effect, where stock values dropped initially, followed by a steep and sustained rally.

He explained: "We are now at a good entry point because we are past the bottom of the J-curve and we are at the point where rising corn prices have to be passed on. Historically, when grain prices go up by 100 per cent, 30 per cent feeds through into livestock prices. This time we believe 100 per cent is going to feed through."

Inflation in corn prices is being driven by fundamental long-term factors, Mr Armstrong said, which could make livestock prices double in the coming year.

"The typical cow costs £1250," he continued. "In 18 months if you don't kill that cow you'll spend just as much on corn to feed it. It's never got to that level before."

Since he and Ms Cukic bought exposure through the ETF Securities tracker and the Merrill Lynch structured product, livestock prices have risen 10 per cent. Mr Armstrong said investing in live cattle was a natural extension of the pair's focus on the soft resources space.

Commodities as a whole comprise 10.2 per cent of the DTR fund, while they make up 16.1 per cent of DDR. The $2.7bn (£1.4bn) DWS Global Agribusiness fund and the £201.7m Eclectica Agriculture fund are the main collective vehicles Insight uses to get access to the soft asset class.

Mr Armstrong and Ms Cukic have been positioning their multi-asset funds for a stagflationary environment for some time, in April adding a platinum ETF across the board as an inflation hedge and buying a yield curve steepener from Goldman Sachs.

In recent weeks they have put more money into the $44.1m BlackRock Global Capital Securities Absolute Return fund, run by Owen Murfin, which holds investment-grade bonds.

Mr Armstrong said he had also been buying subordinated debt directly from financial companies.

"The credit crisis has led to spreads widening to levels that offer incredible value," he said.