A new holding in its stable of uncorrelated funds is the £93.3m City Financial Absolute Equity, a long/short strategy run by David Crawford.
“We like Crawford’s track record in falling markets, but also his ability to benefit if markets continue to tick up,” said partner, Mark Smith.
“The performance on short side has proved right for us since we bought the fund in April. It has been doing the opposite of what the UK market does, as does Cartesian UK Absolute Alpha, which we have used since 2007.”
Other funds held in the absolute return space include Jupiter Strategic Total Return, Premier Defensive Growth, Troy Trojan, Odey European and Veritas Real Return Asia.
The AG Portfolio’s alternatives bucket also includes Quadris Environmental Forestry Fund, Wine Investment Fund and a physical gold ETF.
“Valuations in a lot of areas are too high and we think investors are being too complacent about the risks out there,” added Smith.
“We are happy to add in opportunistic and long-term growth ideas which would be less volatile if markets took a significant setback”.
Examples include Downing Micro-Cap Growth, plus topping up Polar Biotech fund in May, following a 13% fall, and adding more to Jupiter India after a 15% drop.
Smith added: “We have taken profits, or cut our losses, on longer-term holdings like M&G Global Basics, Invesco Latin America, Aberdeen Asian Smaller Companies, Investec Enhanced Natural Resources and Newton Asian Income, and that’s why our cash levels have built up.”
