It's a good time to get into equities, according to William Littlewood. The manager of the Artemis Strategic Assets Fund has increased the equity portion of his fund by 16% over the past two months. Now 83% of the portfolio is invested in the asset class.
Littlewood has 21 years' experience and has run the Strategic Assets Fund since its launch last May. Concerns over the long-term threat of inflation means the fund is focusing on equities. "Cash is going to continue to yield you very little. Bonds under our scenario of inflation later will be a very poor investment and will offer extremely low returns," he told The Daily Telegraph. Littlewood is so positive that inflation in on the cards that he holds short positions in Japanese, US and UK government bonds (since if inflation rises, bond prices tend to fall).
But Littlewood doesn't think equities are about to surge. Instead, he is selectively bullish on valuations: "In some ways we are being forced into equities where price-to-earnings ratios are not too high. Corporate profitability has also been extremely robust given the recession we've had." As a result he favours large-cap defensive stocks which can thrive without a boom he holds the likes of GlaxoSmithKline, Royal Dutch Shell and Coca-Cola.
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The fund has returned 21.1% in the last year beating the active managed average of 17.7%. The "flying start" is down to the fund's flexibility, says Mark Dampier of Hargreaves Lansdown. Littlewood can invest across all asset classes and take short positions. That sort of freedom is "an asset in current markets".
Contact: 0800-092 2051.
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Artemis Strategic Assets Fund's top ten holdings
| GlaxoSmithKline | 2.5 |
| AstraZeneca | 2.3 |
| Royal Dutch Shell B | 2.3 |
| BP | 2.2 |
| Lloyds Banking Group | 2.1 |
| IG Group Holdings | 1.9 |
| ExxonMobil Corp | 1.7 |
| Mitie Group | 1.7 |
| Merck & Co | 1.6 |
| Serco Group | 1.5 |
