He has overweights to equities and cash, with underweights in place for bonds and commodities.
Geographically, he has no neutral positions, overweights to Japan and Europe and underweights in the UK, North America, Asia ex Japan and emerging markets.
“We are still long equities and underweight bonds, although not aggressively so,” Greetham says. “We have a particular overweight in Japan and Europe, as there will not be any tightening in the near term.
“They are still printing money, even though their economies are actually pretty good,” he explains.
“If you feel we are heading into an overheat and the Fed is going to slam the brakes on to cool things down, you would be repositioning your portfolio now. If you think, as we do, they will just gently tap on the brakes, then it is going to remain a pretty good environment for equities.”
The short and long of it
“Where central banking policy divergence really has the most impact is not actually in stock markets but in currencies, so we are short the yen and euro, and long the dollar and sterling,” he says.
“The benefits of investing in Japanese or European stocks is even greater if you go short in the currencies as well. You get higher returns without increasing your risk by a corresponding amount.”
With Greetham at the allocation helm, RLAM makes sparing use of third-party active funds, with Greetham saying that investing directly is usually cheaper. He says there are certain instances in which he will use outside providers, whereby it would cost more to replicate the exposure than to buy a tracker fund.
“I am generally not in favour of providing a multi-asset fund by using third-party active funds, largely because it adds another layer of costs. But you want the ability to use instruments provided by outside parties in certain circumstances, where it would actually cost you more to get an in-house team doing it,” he says.
With his asset allocation process in place, Greetham is now busily preparing the launch of RLAM’s new multi-asset funds for the retail and institutional channels.
“We intend to have a retail range available, which offers flexibility on a wrapper-agnostic basis and across different risk appetites.”
Having made his big move, Greetham expects to stay put for a long time.
He says: “I have not moved around very much during my career, and I wouldn’t consider going anywhere unless I thought I could stay there forever.”
