Mick Gilligan, head of research at Killik & Co, said he believes the fund will continue to do a good job of preserving capital and views Gibbs as a good insurance policy if conditions for risky assets deteriorate again.
Gibbs remains extremely cautious about the outlook for the global economy and has positioned the portfolio to weather further falls in asset values.
The aim of the fund is to generate an absolute return independent of market conditions by investing on a global basis in a wide range of asset classes.
As Gibbs’ concerns about the macroeconomic outlook far outweigh any positive valuation case and his desire is to preserve capital, his net stock market exposure remains very low (6%).
Gilligan said the main portfolio exposure is garnered via currency markets, with a short position in the euro at the end of August the equivalent of 65% of net assets.
Favoured currencies on the other side of the trade include the Canadian dollar, Norwegian kroner, Japanese yen and sterling.
Gibbs’ current position means the fund is likely to lag the stock market if QE3 prompts a rally into the end of the year.
But while returns have been fairly muted since the fund launched they have been in excess of Libor and the fund has performed well during periods of weakness in equity markets, underlining its negative correlation to equities.
