Cazenove’s multi-managers have added positions in the BlackRock Gold & General and the JPMorgan Natural Resources funds, in anticipation of what they see as the next stage in the global recovery.
Robin McDonald, co-manager of Cazenove’s multi-manager range, said his team had added the JPMorgan product as a replacement for a holding in the Aberdeen Emerging Markets fund.
“If there has been a bull market in the past five years, it has been in the emerging markets consumer area,” he said. “These companies are overearning, while natural resources [companies] are underearning.”
The manager described the JPMorgan fund as an “appropriate way to maintain emerging markets exposure”, while adding a more cyclical bias to the team’s portfolios.
Both the BlackRock Gold & General and the JPMorgan Natural Resources funds have suffered significant losses, as the price of commodities and related equities fell dramatically in the past three years.
But some fund buyers – including Jupiter’s John Chatfeild-Roberts – have tentatively begun returning to the asset class in an attempt to anticipate the bottom of the commodities market.
Mr McDonald said the small investment in the BlackRock Gold & General fund was driven by the current level of gold-related equities relative to the price of gold. Historically, gold has traded at seven times the average value of gold company shares, the manager said, but this ratio was currently nearer 13-14 times.
“If that ratio is to revert, then gold could fall or equities could rise,” he said. “We think gold shares have the potential to rise.”
Elsewhere in the Cazenove funds, co-manager Joe Le Jehan said the team was standing by its holding in the Fidelity Special Situations fund, in spite of manager Sanjeev Shah’s decision to retire from fund management at the end of this year.
The Cazenove managers have met with Mr Shah’s successor Alex Wright and, while recognising the handover will have “implications” for the management of the fund, Mr Le Jehan said he felt the Special Situations fund was “where the opportunity is”.
Since the fund was added to the Cazenove portfolios at the end of 2011 Mr Shah has delivered top-decile performance.
Meanwhile, Schroders’ managing director Robin Stoakley is aiming to boost the Cazenove multi-manager team’s assets under management significantly in the next 2-3 years and has targeted a similar level of assets to Jupiter’s Merlin multi-manager range.
Mr Stoakley said he was aiming to grow the team’s assets from its current £1.8bn across the seven funds to nearer £10bn to compete with Jupiter’s flagship fund-of-funds products, run by John Chatfeild-Roberts.
He added that the Cazenove funds would remain separate from the three smaller Schroders-branded multi-manager funds for the time being. However, he said the trio of products – that are run by Schroders’ multi-asset team – remained under review.