Iveagh Private Investment house has made a series of tactical portfolio allocation in anticipation of further market turbulence, says chief investment officer Chris Wyllie…
The past week has renewed concerns for many investors about the global economy, in particular growth expectations, leading to equity market corrections of up to 20%. Markets that had been, relatively speaking, outperforming have borne the brunt of the sell-off with the only exception being the natural resources sector which held up reasonably well.
Our own economic indicators now point to a severe test of commodity price support levels and this may well be the next asset class to buckle. On this basis we have tactically reduced the relevant exposures across the Iveagh Wealth Fund and the Iveagh Core Portfolios, exiting and halving our natural resource positions respectively whilst maintaining a 5% allocation to gold. We have also increased our exposure to longer duration treasuries, financed by the realisation of some profit from our Australian bond portfolio and the sale of our technology positions.
The Iveagh Wealth Fund remains defensively positioned with an underlying equity exposure of 35%; however, an additional option strategy should ensure the funds participation in any near-term relief rally.
