Psigma Investment Management has taken profits in Japanese and European equities, bringing its cash weighting to its highest possible allocations and going underweight developed world equities for the first time in six years.
Psigma, which invests its clients’ money into third-party funds, has reduced its allocation to developed world equities from 40% to 37.5% over the past couple of months. This is the first time the firm has gone underweight in equities since 2008. The firm began the year with developed world equities at 42.5%.
In Japanese equity, profits were taken in the Jupiter Japan Fund and the Lazard Strategic Japanese Equity Fund. In Europe, the firm sold its total exposure to the Rothschild European Synergy Fund, which was a 2% allocation across its portfolios.
Half of the total 5% taken out of equities by Psigma has been added to cash. This takes the cash allocation to an overweight of 7.5%, nearing the firm’s 10% limit. The remaining 2.5% went into seeding the Neuberger Berman Short Duration Emerging Market Debt Fund in March.
Tom Becket, chief investment officer for Psigma, says profit taking was “long overdue”.
However, he explains the challenges the firm faces in finding new investment opportunities: “We are now struggling as much as we have done in the 12 year history of our business, to find high-quality, attractive investment ideas. This leads us to have a higher cash weighting, perhaps for some time to come.
“If we were pushed, I think we would lean towards emerging market equities. I feel that is the best medium-to-long term investment opportunity. Chinese equities and other areas of North Asia are very attractive, but we await a better entry point.”
©2014 funds europe