In a note to investors at the end of November, Mr de Tusch-Lec wrote: "Such is the volume of macroeconomic and geopolitical news confronting investors that they inevitably have less time and attention to devote to corporate events.
"Perhaps it is a consequence of this that they are prizing stocks where the investment thesis is simple and where earnings are predictable, even if the multiples on which they trade are (in our view) excessively high.
"The extension of this extreme aversion to risk is that the market is punishing any additional uncertainty on a stock level unusually harshly and has less patience than it might in more ‘normal’ conditions.
"As a result, the dispersion in valuation between expensive but predictable stocks and cheaper but more volatile ‘value’ stocks has widened to extreme levels once again.
"From the perspective of the fund’s performance, this lack of patience – and this willingness to pay such a high premium for certainty around earnings – is unhelpful: the fund underperformed the index and its peers."
His fund has a strong long-term track record but has been among the very worst performers in the IA Global Equity Income sector over the past year after it lost 13 per cent in the year to 7 January, compared with an average loss of 6 per cent in the sector.
Mr de Tusch-Lec said he would continue to invest in the way he has done for the past year, but he added investors in his fund would have to be patient to see a return from the shares in which he is invested.
Darius McDermott, managing director at Chelsea Financial Services, said: "Jacob is a fund manager we rate and hold in our fund of funds and buy lists.
"To put it into context, when we launched our fund of funds business in June 2017, for the first calendar year, his fund was one of the best performers, but since then, not only has he given [taken] those gains, he has lost us money. But all fund managers have periods of bad performance, and we still hold Jacob’s funds."
David Coombs, who jointly runs £963m across a range of four multi-asset funds at Rathbones and has recently increased his exposure to the equity market, also said investors needed to be more cautious.
He said: "There is no doubt that 2018 was a tough year for investors, including us. But we managed to dampen the downside and are now positioned to participate in the upside we see for 2019, because contrary to popular belief, that upside does exist.
"There can be a tendency to jump ship and make big reductions in risk. But volatility is a friend of the long-term investor, not a foe - it can be present significant opportunity."
Mr Coombs suggested the greatest risk facing investors were "investors themselves and any wholesale caution".
He added: "We, for one, are ignoring the noise and are adding to some of our equity positions that have fallen but we continue to see long-term opportunity in and where the investment case remains compelling.
"For us, we see opportunity to buy these names at the cheaper levels recent volatility has provided and wait for the gain."
david.thorpe@ft.com
