His strategy for the next half year is to make room for US equities and gain exposure to emerging markets.
Currently the fund is overweight European equities, with 46.8% of its assets in this sector, but the rising costs of stocks is making it increasingly difficult to buy into and maintain these assets. An example of an expensive European stock he holds is Saint-Gobain Building Distribution, the leading building materials distributor in Europe.
“Europe is no longer hated but no longer cheap. While it still makes sense to be overweight in European equities, this year it is much more stock specific. It’s a tough situation,” he said.
European equities are already factoring in the pricing of bond yields and higher growth.
“The situation is no longer as straight forward as a year ago,” de Tusch-Lec said.
However, he remains positive that profits can be found in certain countries. He mentions Scandinavia, in particular Denmark, and Eastern Europe as “pockets of good countries”.
On emerging markets, he has recently bought into emerging markets specialist Ashmore as a way to gaining emerging market debt exposure.
“I’m neutral on emerging markets, it’s not the time yet to be in these markets. But there is selective opportunity.”
In the six months to date, the fund has delivered a cumulative performance of 6.4%, compared to the IMA Global Equity benchmark which delivered 1.8%, according to FE Analytics. Click here to see the fund factsheet.
