In focus
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Manager Robin Geffen says using property as a diversifier in pension
funds is “practically criminal”
FE TRUSTNET
companies are currently trading at
significant discounts to developed
market peers, but have the potential
to grow faster.
The Neptune Balanced fund has
delivered a total return of 689.46 per
cent since launch at the end of 1998
compared with gains of 163.58 per
cent from the IA Mixed Investment
40-85% Shares sector.
FACT BOX
MANAGER: Robin Geffen / LAUNCHED: 31/12/1998 / FUND SIZE: £455m / OCF: 0.87%
FE CROWN RATING
PERFORMANCE OF FUND VS SECTOR SINCE LAUNCH
Neptune Balanced IA Mixed Investment 40-85%
(689.46%) Shares (163.58%)
700%
600%
500%
400%
300%
200%
100%
0%
Ja
3
-100%
Geffen said bonds are unlikely to
deliver the kind of returns many
investors have grown accustomed to
over the past 30 years.
He pointed out that bonds sold-off
at the same time as equities in the
market correction at the start of 2018,
bringing into question their perceived
diversification benefits.
Another asset class traditionally
used as a diversifier is property,
making up 5 per cent of the average
balanced fund. However, Geffen also
issued a warning about this sector.
“We have zero per cent, we have
always had zero,” he said. “If you
think about it, many of the people
approaching retirement are empty
nesters and are about to downsize.”
“So, loading them up with property
in any kind of long-term pension fund
when they’re reaching retirement is
practically a criminal thing to do.”
Instead of traditional diversifiers,
Geffen said he prefers to use put
I
nvestors are not taking enough
risk to meet their retirement goals
and are putting money into the
wrong types of diversifiers, according
to veteran investor Robin Geffen.
Geffen, who manages the £455m
Neptune Balanced fund, believes
the shift away from defined
benefit schemes towards defined
contribution ones has created a
shortfall in pension pots.
“There are an awful lot of people
who are currently in the long-term
savings market whether they like it or
not,” he said.
While the end of the market cycle
may be approaching, he said that it
would be wrong to exit equities given
their ability to beat inflation over the
long-term.
As central banks begin to withdraw
the monetary and fiscal stimulus
measures introduced since the
financial crisis, anxious investors are
likely to want to diversify. However,
Neptune Balanced
options to hedge against short-term
equity market drawdowns.
The equity bias can be seen in the
Neptune Balanced fund where 82
per cent of the portfolio is held in the
asset class, with just 13.5 per cent in
fixed income.
Another area of conviction is
emerging markets – in which it has
a 13.6 per cent weighting – where
Source: FE Analytics
trustnet.com