Fund of the week: why cash beats credit

“Nils Taube has always been particularly good at making money in difficult periods,” says William Rees Mogg on The Daily Reckoning. Which should make the current economic climate the ideal picking ground for the 79-year old. 

Estonia-born Taube fled to Britain at the age of 18, eventually becoming a stockbroker with the City’s Kitcat & Aitken, and an adviser to Lord Jacob Rothschild and George Soros, among others. During 35 years in fund management, he has delivered an average annual return of 15%. Smith & Williamson Taube Global is the latest fund to come under his control, after launching in April. Since then, it hasn’t moved much, but has outperformed the FTSE 100.

But Taube found himself in a similar position back in 1987. Having predicted a market crash, he began shorting stocks to the point that he was down £7m by that September. “Not a big position, but quite a lot to be short,” he tells The Sunday Times. When the market dropped, he came out the other end £75m the richer.

“Taube… has shown an eye for spotting global trends and long-term themes ahead of the market,” says Jonathan Miller of Citywire in The Sunday Times. So it’s worth noting the fact that he has been moving the fund into gold and cash, and is avoiding the shares of firms reliant on credit. “This is absolutely a bear market,” he tells Kathryn Cooper in The Sunday Times. But he still likes oil companies, despite recession fears, and agricultural stocks. 

Contact: 020-7131 4951  

Smith & Williamson Taube Global Top Ten Holdings

Name of holding, % of assets

BP PLC, 10.6% 
Royal Dutch Shell B, 9.3%
Newcrest Mining Ltd, 7.1% 
BHP Billiton Ord, 6.5%
Lihir Gold Limited, 5.8%
Talisman Energy Inc., 4.7%
UTS Energy Corp NPV, 3.7%
Petro-Canada Common, 3.6%
Australian Agriculture, 3.6%
Chiba Bank, 3.2%


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