Originally a Jersey-domiciled OEIC, the RHFS Diversified Strategy Fund has been brought onshore and has applied for entry into the IA Flexible Investment Sector.
Managed by Doug Milward and Paul Milburn the fund retains a significant bias toward structured products, currently around 10% and, the managers say this position will be boosted from the secondary market, when periods of volatility create buying opportunities.
However, the fund’s largest exposure remains equities, with 54.5% of the £5.08m fund currently invested in international equities. UK equities account for 29% of the fund.
The fund’s largest overweight, however, is in European equities, which is 5.5% above the benchmark, because, the firm believes, the region has further room to recover. It has a similar view of Japan, which occupies a 4.3% overweight in the fund.
“We believe quantitative easing will have a positive effect on risk markets. The expectation is that QE will force investors up the risk scale which will see a rising demand for equities,” Milward explained.
On the underweight side, the fund has a poor view of the outlook for bonds, but retains a 10.2% allocation to sterling strategic bonds and a high yield bond fund. According to Milburn, the firm’s decision to invest using strategic bond funds is based on their ability to invest across the credit spectrum.
