How do you limit volatility and timing risks? F&C Investment Trust’s (F&C) long-running manager Paul Niven discussed how he seeks to achieve this through a blended “best ideas” approach.
 
In practice, the core of this approach is diversification, including a blend of listed and unlisted equities and a mix of underlying style factors – which helped the trust avoid the worst of the growth sell-off in 2022.

Nonetheless, he argued that diversification does not have to mean that an allocation is passive. Instead, he allocates the trust’s portfolio to different, concentrated sub-portfolios with clear styles, managed both within the trust’s own investment house and by external managers.

He also explained how his own active input into the trust’s overall allocation came into play through the tumultuous three years since the COVID-19 pandemic began. Most notably, he has rotated away from US listed equities and into the private equity mid-market, as valuations are looking especially attractive in this area. This allocation in particular embodies his belief in taking “rewarded risks”, while using diversification to balance these.
 

 
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Disclaimer

 
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
 





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