“While we recognise there are some big issues in terms of demographics, we are investing in companies, not the country. And we have seen some index-bucking performance from Baillie Gifford’s Japanese funds. We feel there is still something to go for there.”
Mattioli Woods has also stuck by China even when it was regarded as one of the “bogeymen” at the beginning of the year.
“We don’t have huge allocation there but we’ve felt more comfortable investing in China than perhaps others have. Really, across Asia Pacific, we are still finding opportunities,” he says.
The team is more selective when it comes to emerging markets equities. Gibson says: “Some of our portfolios contain Indian equities but we aren’t comfortable with buying a basket of broad emerging market holdings because not all stocks are heading in the right direction.”
Both open-ended and closed-ended property funds remain staple diversifiers across the portfolios. Even after the wave of big-name property fund suspensions that took place in July, Gibson still has conviction in the asset class.
“Just because we think that something is going to return 4-5% doesn’t mean we should sell it if it proves to be good in the current environment.
“The evidence is there that the post-referendum valuation worries have not come through. That’s not to say we feel property is going to suddenly jump by 25%.
“We feel that modest, inflation-beating returns are perfectly gettable from commercial property and very nice.
“There is no one asset we feel we have to own,” he says. “We are certainly happy to be overweight and underweight where our conviction carries us, and we’re happy to hold nil if it takes us that far.”
