The manager of the Crux UK fund has explained why he could underperform if Britain's exit from the European Union goes smoothly.
Jamie Ward said that despite his £60m fund investing in UK businesses, only a small minority of the revenues of the businesses he invests in are exposed to the UK domestic economy.
He said: "It has always seemed to me that one of the freebies you get in fund management is geographic diversity - where they do business.
"I have a large proportion of international businesses. About 19 per cent of my invested business's revenues come from inside the UK.
"I could end up underperforming quite badly if the Brexit settlement is conducive to a positive market outcome for UK domestics. I have a bias within the portfolio that leads me to being pro-hard case."
Mr Ward said he did not have any inside information that led him to believe one outcome of Brexit was more likely than another, and added he "didn't particularly care" since the fund's objective is to achieve growth over a period of more than five years.
Despite this Mr Ward said his fund was lower risk than many of its peers because of the types of businesses he invests in.
He said: "It is a lower risk portfolio than the index and most funds are probably higher than the index so in a year like 2018 when you had two periods where the market got really hard, that’s where we get meaningful outperformance.
"The types of business I invest in are businesses where the return on invested capital is consistent so you don’t get mixed up in investing in the wrong thing at the wrong part of the cycle. I have a willingness to let cash drift up.
"That's why I think I am low risk."
Earlier this year the amount of the fund invested in cash reached 9.5 per cent, but has since fallen to less than 4 per cent as Mr Ward invested in a number of opportunities he saw, such as banks.
He said: "The big opportunity, and I have been saying this for three or four years, is in banks.
"People still hate banks because of what happened 10 years ago and what they are not getting is that the balance sheets of banks are stronger than they have been since the 1960s."
The Crux UK fund has lost money over the past year - losing 3.03 per cent - but has outperformed its sector, the IA UK All Companies, which lost 5.22 per cent.
Over three years the fund has returned 24.97 per cent, again outperforming its sector, which returned 23.73 per cent.