Fund managers diary

Fund Strategy - 12 Sep 2011 | By Luke Hickmore, Roger Webb

Friday (LH) The end of a tough week in credit markets with yield spreads heading back to 2010 levels. Evening improves, as I go out to the Edinburgh Fringe to see an Irish comic talk about the country’s fiscal problems. He picks on the front row of the audience to see what their jobs are: fund manager, investment banker (cue groans and jeers), fund manager, fund manager. I tell him I’m a part-time drummer (also true).


Saturday/Sunday (LH) Spend Saturday morning visiting the recently-refurbished National Museum of Scotland with my four-year old daughter. Great fun, but exhausting. Sunday I catch up with some research - especially on possible outcomes for the eurozone periphery crisis.


Monday (LH) Bank holiday in England, but not Scotland. Even so, I take the day off, as it is my daughter’s first day at school. When she gets home, I ask how her day has gone. She replies, “Sorry, dad, it’s a secret, I can’t tell you.”

Tuesday (RW) First day back from a couple of weeks enjoying the “great British summer”. Next year, the Med, I think. I spend much of the morning clearing the backlog of emails and discussing a few new positions we have put on. Apart from a couple of calls with Luke in Edinburgh, I keep my head down for most of the day. The markets have sold off through August, but something of a recovery has emerged and spreads are back to pre-holiday levels. Newsflow has definitely been weak; I would like to reduce our risk positions.

(LH) Nice to have Roger back in the London office. There’s been a decent rally in credit markets after Friday’s improved economic data. European politicians have mercifully remained quiet, which has helped. Discuss a few ideas with our high-yield team about strategy. Schedule a chat with Roger to see what fits in the fund. He doesn’t feel any immediate need to buy. Lunchtime is dominated by band practice. I’m Bond Jovi’s drummer - other members of the fixed interest team complete the line up - and we are doing a charity gig in Edinburgh next month.

Wednesday (RW) Busier trains as folk return from holidays - no seat. Chat with guys from our multi-manager team on the way in. Like us, they have taken some risk out of their funds in recent months. The credit market rally continues and today’s data has lent some support. It feels like bad economic data from here will just encourage investors to expect more policy stimulus. For us, we still see big problems in sovereigns and financials, but gradually, we are getting more positive.

(LH) Roger and I spend some time thinking through Europe’s problems. How can we shape our portfolios to benefit? We like economically sensitive bonds such as high yield (good value, as too much recession risk priced in). In contrast, financials are too closely related to troubled sovereigns. Spend the afternoon discussing trades with some of our sector specialists.

Thursday (RW) Dial in to morning meeting. Start a new month with an optimistic outlook. That said, September may prove to be more of the same in terms of volatility. As the rally continues we grasp the opportunity to take some risk out of our funds.

(LH) Meetings today to prepare for a client event in late September with our wholesale sales team. We discuss a few themes that equity, fixed interest and property are following, and how each of the asset classes are implementing the ideas in trades.

To receive more relevant articles like this one, why not sign up to our briefings and breaking alerts by clicking here and Follow @fundweb