It would be harsh to draw conclusions from just six weeks’ worth of data, though it interesting to note that the most pragmatic of wealth managers have not let style bias hold too much sway in their asset allocation.
Coutts is an interesting example, with UK CIO Alan Higgins revealing that his team has spent time looking for proven quantitative methods for deciding between the different styles.
“We have looked to see if there are any signals from quant on where to invest, but nothing really works,” he says.
“It becomes a qualitative judgement call. We are making that call, but with balance in the portfolio rather than just putting it all into value.”
Higgins talks of a “brutal” time for some domestic equity funds in 2014, after years of the UK being a positive Alpha market.
While now looking to pick up more value managers, Coutts also maintains holdings in “big time” growth managers such as Lindsell Train UK Equity and Investec UK Alpha, which are more on the quality or growth at a reasonable price (GARP) side.
He adds: “We don’t have a huge slug in the value area. However, we do have financials funds, and we are looking to bring on a value fund very shortly to balance that out, because we do think after a long period of outperformance from growth it is right to orientate in this stronger economic growth environment towards value.”
