Within this dispersion, Wharrier is finding a number of good opportunities, particularly within the financials sector. But, he said, it is a bit disconcerting to admit to liking large companies as most active managers have performed really well in the past few years by being structurally underweight large caps.
That is not to say that he likes all large caps, but that there is now value apparent within the sector. Also, the broader range of opportunities is important, because he believes that over then next few years the range of economic outcomes is quite wide, so it is dangerous to have a portfolio dominated by a single macro bet.
“I don’t want to have that binary type view in the portfolio so we have been trying to flatten the macro risk and focus the risk at the stock level, which is easier said than done.
“It is about having a lot of companies in the portfolio where self help is driving the investment case, but also choosing some stocks that will benefit from interest rate volatility and looking for those companies that are special, that have pricing power in a world of low growth.”
