Investment managers make changes to investment approach

Investment managers are tilting their investment portfolios in the current market conditions without changing their investment strategy, topping them up with cash, bonds and precious metals.

Flexibility in portfolios and sources of yield to counter movements in equities are top of mind for investment managers looking to manage as best they can the impact of factors such as plummeting oil prices and Coronavirus.

“Protect to make capital to offset defensive market positioning is the approach,” says Dan Miles, managing Director and Co-Chief Investment Officer, Innova Asset Management. “We are using hedges to balance out this approach. This includes bonds for deflation, precious metals, managed futures strategies and long volatility.”

InvestSense says its flexible investment approach means it can tilt its portfolio to value rather than growth stocks as it sees fit.

“We have been cautiously positioned for a while and our Alternative defensive positions haven’t added value for four to five years, but they’ve started to pay off in the past two weeks,” says Jonathan Tolub, Director, InvestSense. “And we’ve added a little bit more cash and gold along the way.”

According to Russell Investments, its long term views on valuations have paid off in the recent bout of volatility and remains underweight in listed assets.

“We continue to look for valuations in cheap stocks and investments,” says Daniel Choo, Portfolio Manager, Russell Investments. “This is consistent with our approach.”

With a concentrated investment approach of 20 stocks, Franklin Templeton Analyst Francyne Mu says it is prudent to stress test this approach, but they are not changing their position.

“People are actually now looking past the challenges. TAL Education based in China is one of our held stocks which offers online tutoring. We are seeing growth over the long term.”

Meanwhile, Lonsec Investment Solutions Executive Director and CIO Lukasz de Pourbaix says it has made some changes to its portfolio by increasing portfolio diversification through the addition of strategies that offer diversification to equities and bonds.

“We have also increased exposure to sectors that offer reasonable value and that can benefit from a low interest rate environment such as real assets.”

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