Martin Gray’s very cautious stance has finally begun to pay off, says Mark Dampier at Hargreaves Lansdown. The manager of the CF Miton Strategic Portfolio Fund switched out of property, emerging markets and commodities in 2006, shifting money into more defensive areas such as sovereign debt and cash. Gray admits he was “about one year too early. But better early than late.” As a result, the fund, which he’s managed since 1996, has returned 4.3% over one year and 12% over three – very respectable in the current climate.
A self-confessed gold bug, “the more Gordon Brown sold, the more I bought”, he says. About 5% of the portfolio is now exposed to the precious metal via equity funds. “Selling the taxpayers’ family silver at the bottom of market was always a good buying signal.” About 39% of the portfolio is still in cash. However, Gray has now begun gradually raising his exposure to equities, with a focus on British commercial property and Japan.
On UK property, he says that “things look pretty awful in the short term”. But with share prices down 70%-80% from January 2007, there’s some bargains to be picked up, especially in the real-estate investment trust sector, where he believes that property groups like “British Land are not likely to break their covenants”. In Japan, meanwhile, things look even worse. “But I’m a very patient man.” Over there, property stocks have also fallen sharply, “but at some point someone will realise that these companies are almost 100% let and not a heap of trash like other property companies. Until then, I’ll be picking up stock on the cheap.”
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CF Milton Strategic Portfolio Fund’s top ten holdings
| Name of holding | % of assets |
|---|---|
| Traditional Funds PLC – Thames River Global Bond | 5.50 |
| Barclays FTSE 2yr Bear Note | 4.32 |
| Land Securities Group PLC | 4.27 |
| Pimco Euro Bond Inst Acc | 3.89 |
| BlackRock Gold & General Class A | 3.59 |
| Newton International Bond Class A | 3.38 |
| CF Morant Wright Japan Class B | 3.23 |
| M&G Gilt & Fixed Interest Income Class A | 2.77 |
| Japan Residential Investment | 2.45 |
| Atlantis Japan Opportunities | 2.44 |