What asset classes are getting the attention of these Elite Rated multi-asset managers this Valentine’s Day?


February 14th. Eagerly awaited by some, dreaded by others.

When it comes to investments, our relationships can also be short-term or long-term. They can even be volatile: experiencing euphoria one minute followed by despair another.

FundCalibre asked a selection of Elite Rated multi-asset managers which asset classes are capturing their attention this Valentine’s Day, and which are suffering from unrequited love.

The investments they fell in love with

The team behind the Close Managed Income fund sticks with music royalties.

“We first invested in music royalties in 2020 and added to our stake in 2021,” they told us. “It gives us access to a revenue stream from over 150,000 songs, across all musical genres, and with new areas like streaming or placement in films and commercials, capital potential as well.

“One of the great things about this field is that it’s truly uncorrelated to market movements – we play music when we’re happy or when we’re sad, when we’re in love or when we’re just let go.”

Kelly Prior, investment manager on the multi-manager team behind BMO MM Navigator Distribution, leans towards absolute return funds (and in particular market-neutral strategies).

“The devil is in the details for this asset class,” she said. “We’ve come a long way from the days when long-only managers dabbled in a bit of short selling and then suffered the pain of hedging the positions they screwed up.

“Market-neutral strategies – while often unspectacular – can smooth the returns of a larger portfolio in times of volatility if done well.”

Commodities caught the eye of Rathbone Strategic Growth Portfolio Manager David Coombs.

“We believe inflation fears will remain elevated in the first half of this year and possibly longer should a more virulent strain of COVID materialize,” he said. “To mitigate both inflation and geopolitical risk, we believe exposure to more economically sensitive commodities makes sense, industrial metals, energy and agriculture.”

The managers of Ninety One Global Income Opportunities are attracted by sustainable dividends.

“Over the long term, owning stocks with an above-average resilient dividend yield resulted in similar performance to major equity indices, but with less loss and volatility,” they explained.

“The tightness of markets over the past two years, when high-growth stocks have dominated, has left sustainable dividend-paying stocks attractively priced while possessing the ability to increase income – a valuable trait at a time. increased inflation.”

Investments they would prefer to do without

The Jupiter Merlin team recently sold Chinese stocks.

“If you feel you are becoming less and less of a priority, then it’s probably time to move on – as was the case for the Jupiter Merlin Portfolios with our Chinese equity exposure,” the managers said.

“We have had concerns about investing in China for some time, and as their communist ideology has grown stronger, we now believe that the interests of minority investors in Chinese companies are well below the hierarchy of the government. State and, by extension, companies which have to respect their rules. Partners who prioritize transparency, clarity and shared goals are better sought elsewhere.

Kelly Prior, investment manager on the multi-manager team behind BMO MM Navigator Distribution is unimpressed with crypto.

“I don’t believe in investing clients’ money in an asset if I don’t see a path to its value,” she said. “When people think of crypto they think ‘Bitcoin’ but it’s much broader than that with over 13,000 different cryptocurrencies and a total market capitalization of around $2 trillion (but that could be very different as you read this given the volatility).

“I have little to offer in the original analysis, and I have yet to read, or explain to me, how these assets are good investments. It’s not because the friend who owns a dog made a mint that my clients will do the same.

David Coombs, manager of strategic growth portfolio Rathbone, also slides left on emerging market debt.

“Emerging market debt is part of our equity risk allocation,” David explained. “Following the recent selloff in the higher growth areas of the US equity market, we prefer to use our risk budget to take advantage of this volatility, which should provide returns above what we can see on emerging market debt. in a rising US interest rate environment.

The managers of Ninety One Global Income Opportunities are above the infrastructure.

“The infrastructure theory is attractive: income-driven return with low equity sensitivity,” they said. “Their performance during the major market downturns of the past 10 years, however, showed the fragility of the asset class caused by concentrated holding books, reduced liquidity and underlying exposures with greater economic sensitivity as public-private partnerships have dried up. We believe there are better ways to achieve the desired return profile.”


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