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Inside the mind of a fund manager

Lipper Alpha Insight

19 Sep 2017

Photographer: Tim Wimborne
Photographer: Tim Wimborne

Through a series of fund manager chats, Lipper Alpha Insight has the inside track on the big issues facing the industry. Here are some of the 2017 highlights.

What keeps fund managers awake at night? For Rathbones fund manager David Coombs, it’s most likely to be the effect of Brexit on sterling and inflation.

Find out insight from Fund Managers on Thomson Reuters Lipper Alpha Insight

David is one of 19 fund managers to have spoken in depth to Lipper Alpha Insight’s Jake Moeller this year about their fears and hopes for the industry.

Other topics have included fintech disruption, populism and the growth of passive investing, as well as small cap out-performance and emerging markets.

How are fund managers tackling these issues and still delivering returns?

fund manager chats on Lipper Alpha Insights

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Jake, who is Head of Lipper UK & Ireland Research, has spoken to 19 fund managers across the UK. Here are some of the highlights:

Fed funds

Short duration for many bond managers seems to be the only game in town, but how do rate rises affect this view?

Jake put this question to Bob Persons, MFS, Meridian US Corporate Bond Fund portfolio manager.

Fund manager quote, MFS

Bob believed that it wasn’t necessarily the case that longer term bond rates will increase as the Federal Open Market Committee raises the funds’ rate.

Listen to more from Bob Persons

Difficult financial times

Jake also spoke to Richard Pease, manager of the European Special Situations Fund & European Fund at Crux Asset Management, about geopolitics in Europe and how this affects stock picking.

Richard pointed out that you can easily create a gloomy picture by looking forward, but by picking companies that dominate niches in a global perspective it’s easier to avoid the political risks which may affect some companies.

Fund manager quote, Crux Asset Management

Hear more insight from Richard Pease

Populism and Brexit

2016 is regarded as one of the most unpredictable years in recent memory, both within and outside the financial world.

Jake asked Patrick Armstrong, CIO of Plurimi Investment Managers, how he deals with the challenges which result from the unexpected.

Fund manager quote, Plurimi

Patrick explained how he follows a strategy to stay on course during times of political risk, such as European elections or Brexit.

Listen to Patrick’s full conversation

Unsurprisingly, Brexit has come up more than once in conversation between Jake and some of the top fund managers in the UK.

David Coombs, Fund Manager at Rathbones, highlighted major concerns on behalf of his investors in relation to the UK’s exit from the European Union.

Fund manager quote, Rathbones

David has been taking a ‘wait and see’ position, and was unapologetic about the cautious stance in his investment outlook and positioning.

But as Brexit negotiations continue, will David change his strategy of little exposure to domestic UK investments in fixed Income or equities?

Listen to interview with David Coombs

Small cap vs large cap

Over the last five years we have seen a golden period of small and mid cap performance.

Jake asked Daniel Nickols, Head of UK Mid and Small Cap Equities at Old Mutual Global Investors, for his views.

In an environment with low global growth, and low and negative yields, large caps have not had an easy time lately.

Fund manager quote, Old Mutual

Adding to this, falling oil prices mean banks, mining and oil companies, which are well represented in the large cap space, have had significant headwinds to face.

In the smaller company universe, however, unique structural growth stocks will do quite well in a low global growth environment.

Hear more insight from Daniel Nickols

Emerging markets

Tom Naughton, Prusik Asian, Equity Income fund manager, considered the impact of geopolitical events in Asia, the reliability of Asian dividends and the quality of the Asian stock universe.

Fund manager quote, Prusik

Hear more insight from Tom Naughton

Find all the fund manager chats at Lipper Alpha Insight. Or get them delivered to your inbox by signing up to our Funds Weekly newsletter.

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