fund manager bambos hambi reduces portfolio to 116 holdings and sells out of abn amro uk growth
Bambos Hambi has cut the number of funds his Rothschild Asset Management's Five Arrows Wealth Management Service holds by 22 since taking over six months ago.
The move was made to create a completely unbiased service picking only external funds from an offshore and onshore universe of more than 5,000.
Funds that have been removed include three Five Arrows funds, UK Smaller Companies, UK Major Companies and US Dollar Bond.
The best known external funds that Hambi has cut from the service are products which were bought during the tenure of previous managers Gary Potter and Rob Burdett, now at Credit Suisse Asset Management. These include Invesco Perpetual European Growth, ABN Amro UK Growth and Deutsche Blue Chip.
Other well-known funds removed from the service are GAM Japan Growth, Henderson Horizon Global Technology and JP Morgan Fleming South East Asia Growth.
The reduction in the number of funds, now down to 116 in total, brings the service closer to the 100 to 110 range that Hambi, who joined in May this year, is seeking. It is a number he believes provides sufficient diversity.
Hambi said: 'The risk profile of the service has been reduced as we have kicked out funds which were providing a strong measure of duplication of other holdings.'
When he took over, Hambi said there was a predominance of growth funds in the service, which offer investors six strategies investing in a number of underlying RAM-managed unit trust fund of funds, as well as three independent stand-alone fund of funds. The total assets under management in the service stands at around £962m.
Hambi, who is supported by a team of three including deputy Marcus Brookes, has moved the underlying fund of funds to a style neutral basis from which they can be tilted towards either growth or value, depending on market conditions.
This is achieved through a mixture of core and satellite funds with the core making up a minimum of 60% at any time. Hambi, who follows house asset allocation views, has also moved to put in a 15% core of trackers in each of the US and UK fund of funds. This has seen the addition of the L&G UK and US Index funds as well as the BGI UK Growth and BGI US Growth funds.
In less efficient markets like Japan, the emerging markets and Europe, Hambi does not feel this is appropriate.
The other significant move that Hambi has brought in since his arrival is a reduction in the amount of cash the service holds to avoid the situation where both the service and the underlying funds are sitting on large cash reserves. A 2% cash position is now considered neutral, down from 5%.
Hambi has also added active funds to his portfolio and these include Mark Costar's new JO Hambro UK Growth, Newton American, managed by Trish Bridson, M&G Global Technology, run by Greg Kerr, and L&G Japanese, managed by Andrew Nagele.
The Five Arrows Independent Growth portfolio is down 10.92% according to Lipper over the period of 30 May to 26 November, bid to bid.
That compares to the active managed sector which saw a drop of 11.06% over the same period.
The Five Arrows Independent Income Portfolio is down 8.62% in the same period. That compares to an average return of 7.69% in the balanced managed sector.
£300bn of liabilities
View from the front row
Transfer from occupational scheme
Appointed by FCA and PSR boards