Caspar Rock, chief investment officer at Architas, has increased his funds' weightings to equities - particularly Japan - in the expectation the momentum behind the recent move into risk assets will continue.
Rock, who runs a range of funds including the £52m Architas Multi-Asset Active Dynamic fund, said although some equity markets have already risen steeply, now is not the time to sell out.
“We are talking about rebalancing the portfolio to move in a more defensive direction, but for now we are maintaining the overweight in riskier assets, because we believe it will take time for the market to become unsettled,” the manager said.
Within the asset class, Rock is favouring Japanese equities, as well as funds with exposure to Asian markets.
Rock bought into the GLG Japan CoreAlpha fund, run by Stephen Harker, across a number of his funds late last year.
The Architas Multi-Asset Active Dynamic portfolio, for example, now has a 6.5% position in the fund.
“We raised the Japan weighting by buying a hedged share class and this helped the performance of our portfolios,” he said.
Rock said the real question for investors in Japan now is when to switch into unhedged share classes to capture any reversal in the recent trend which has seen the dollar appreciate sharply against the Japanese currency.
Elsewhere, Rock remains keen on small- and mid-cap UK equities, holding both the JO Hambro UK Equity Income fund, which delivered returns of 24% over the year to 6 February versus the UK Equity Income sector average of 15%, and the SLI UK Equity Unconstrained fund, according to FE.
The SLI fund, was the top performer in the IMA UK All Companies universe last year, delivering 44.3% versus a sector average return of 15.1%.
Rock is also avoiding safe havens within the portfolio for now, and has no exposure to gilts.
Within fixed income, he has been backing index-linked and EM debt funds, holding the M&G UK Inflation Linked Corporate Bond fund, among others.
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