The Fairtree Balanced Prescient Fund is celebrating its 5th anniversary. It is managed by Stephen Brown and Jacobus Lacock.
“Our size makes us agile, but it’s our ability to build conviction quickly and act that makes the difference,” said Lacock.
That claim is supported by the explosive performance from the depths of the Covid-19 market crash. By the end of March 2020, the fund had moved back to its upper equity limits, which saw it participate handsomely in the recovery and the subsequent stimulus-fuelled rally. Complimentary skillsets underpin that decisive active management.
“Stephen brings strong bottom-up skills to the portfolio, while my background is more macro focused. I think it also helps that we’ve been managing money together for a decade.”
The defining features of the fund include a specialist approach where each asset class is managed by investment professionals with specific and relevant experience. In addition, the fund follows a growth-seeking strategic asset allocation from which they rarely waiver. Lacock explains:
“Most of the cycles we experience are what we call mini-cycles. They don’t warrant aggressive asset allocation shifts. At most, we’ll tilt 5% away from our SAA during those common, short-term market moves.”
It follows that the fund’s outperformance is generated primarily through superior security selection, as much as 80-90% by Lacock’s reckoning. As 2021 draws to a close, the standout positioning in the fund is a bias toward growth and cyclical assets.
“Even if US inflation remains elevated, which we expect it will, equities will continue to perform well if nominal GDP growth remains robust. That is our base case for at least the first half of 2022. US monetary policy remains accommodative, and any tightening by the Fed will likely be offset by China as they cut rates to re-establish their growth trajectory before the 20th Party Congress due to be held next year,” concluded Lacock.
In a world of increasing uncertainty and volatility, finding the right balance of assets at speed could make all the difference. Consider the Fairtree Balanced Prescient Fund if you agree.