There have been enough “false dawns” in the investment world in the past few years for any wealth manager to use strong market periods as an opportunity to grab profits and shelter from financial squalls. And that seems to be the approach of Collins Stewart Wealth Management these days.
On a theoretical balanced portfolio at CSWM, where the asset allocation is typically 60 per cent equities, 40 per cent bonds, the portfolio is currently 49 per cent equities, 35 per cent fixed income, 9 per cent “other” (alternatives, etc) and the remainder in cash, the firm told this publication in a recent interview.
In fact, CSWM is underweight every equity market, Justin Oliver, who manages several funds at the firm and chairs its portfolio construction committee, said at his company’s offices in London. He had flown over from his firm’s offices in Guernsey. (Oliver’s company has, meanwhile, been shortlisted for an award in the WealthBriefing Awards 2013, to be held on 2 May.)
“We are cautiously positioned,” he said. “Since the summer of 2012, we have been slowly reducing risk in our portfolios. The company’s general investment approach is cautious and does not expect performance to “shoot the lights out” during good times but hopes to protect client portfolios during more testing periods.
Oliver spoke about how from an investment point of view, fund managers were operating in a “top-down world” where so much is driven by macro policy, central banks and political issues, rather than the detail of corporate profits, valuations and balance sheets.
The recent uncertain election outcome in Italy, for example, was “an excuse for some people to take a bit of risk off the table”, Oliver said.