Taking Portfolio Adviser through the quantitative screening tool, the firm uses in its multi manager proposition, Gardhouse explains that in order to find the right manager one needs to have a clear view of his or her style, because it is in light of that that performance can be properly measured.
The reason for this, he said, is that different styles perform better at different points in the market. A good example of this theory in practice is the Marlborough UK Microcap Fund managed by Giles Hargreave.
“We have held the fund since 2004 and for much of that period, small-cap low yielding stocks have been a pretty poor place to invest. But, he has been consistently good at picking the right stocks in that space and so has managed to outperform the style bias,” Gardhouse explains.
In terms of current allocations, Gardhouse says the group remains overweight Japan, through its exposure to the GLG Japan Fund.
“We started getting into Japan in 2011, it has risen a lot since then but it is still cheap enough and it has momentum.”The multi-manager proposition is also of the view that the eurozone remains cheap, although
there is not as much value on offer as there was in 2012 when it was two standard deviations below the mean.
At the other end of the spectrum, Gardhouse says the US is now looking expensive, “The market is getting a bit ahead of itself now,” he said.
As for the UK, Gardhouse said it is beginning to look cheap, “it is somewhere in the middle,” he said.
