It has been another summer of uncertainty, with Greek political parties then Chinese policymakers having had their respective stabs at inducing market volatility.
However, while some investors fret over the possibility of the yuan devaluation descending into an all-out currency war, Husselbee, Liontrust Asset Management’s head of multi asset, believes there is a more pressing issue at hand.
He expanded: “While the yuan devaluation has an effect on currency trading, it is not going to do much in terms of the Chinese economy, and the Greece situation has always been an issue of political contagion rather than economic.
“The big deal is the Federal Reserve putting up interest rates – that is what has been driving the markets, and will continue to drive markets.”
But while Husselbee pours cold reality on the hot stories of the day, somewhat ironically, the investor anxiety of which he is so sceptical is actually presenting him with investment opportunities.
“Markets want a nice smooth ride, but there are always going to be some bumps along the way,” he said. “Investors are always looking for something to get excited or anxious about, and when they do it can throw up opportunities.”
Bond opportunities
Husselbee has subsequently identified openings in the bonds space, which, while he is underweight the asset class in his WAY MA Growth Portfolio Fund, have led to sub-set overweights.
“We have been positioning portfolios, particularly bonds, for what I consider the ‘main event’ – the US interest rate rise,” he explained. “Throughout the Greece situation we have taken overweights in European high yield and index-linked bonds, and always have healthy positions in strategic bond funds.
