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Swiss Selector names the most resilient funds he backs

Citywire Selector

As investors concerns of market volatility are on the rise, alternatives, gold and quality fixed income have been the go-to asset classes for fund selector Mikaël Safrana.

The director at Geneva-based private banking group Banque Heritage told Citywire Selector that the investment team has historically tilted towards a conservative investment stance and minimising drawdowns.

Amid concerns of a potential recession on the horizon, Safrana said investors have the choice of either allocating to safe havens or gear exposure to conservative managers in order to weather tough times.

‘A clear winner in the former category has been gold and our go-to product is the ZBK Gold ETF which physically holds the precious metal and can offer delivery. We’ve also increased our allocation to alternatives which can benefit from increased volatility.’

Here, Safrana named the FORT Global UCITS Diversified fund, a diversified systematic program, as a strategy that has proven resilient through time. Elsewhere, quality fixed income remains an essential asset class for when the going gets rough, he said.

‘We’ve been a long term investor in the Robeco QI Global Dynamic Duration Fund as we appreciate its ability to very swiftly adjust its duration exposure.

‘Regarding selecting conservative managers, decisions are more challenging as they need to be closely monitored. A consistently good cushion manager has been the Cullen North American High Dividend Value fund due to its revenue characteristics and focus on valuation.’

Lower delta convertibles are another segment that have proven their worth when it comes to weathering volatility.

‘When expecting a turn for the worst, higher volatility and less liquid strategies would get the cut. These include micro caps, small caps or high yield bonds, to name a few.’

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October 15, 2019