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Food for Thought

Posted on Wednesday, September 30, 2009

The feedback from our recent investment dinner at the London Road Restaurant in Alderley Edge has been superb. My investment manager, Mike Deverell presented on the outlook for commercial property and our external speaker Mitchell Fraser Jones from Invesco Perpetual provided the outlook for UK equities.

Invesco’s UK Income is currently our worst performing UK Large fund over the last 12 months having significantly underperformed our best fund Schroder Income Maximiser. Since the March lows Schroders is up by around 40%, nearly double Invesco's performance!

Invesco made a compelling case as to why the shares within their holding should be well positioned to increase in value in the future whereas some of the holdings in other funds may be overvalued.

We are currently debating rebalancing our UK large portfolio to sell the profits in our best fund and top up the holdings in our worst so that if the tide does turn we can still profit from the volatility.

This goes against most investor’s instincts and emotions, but in the cold heart light of day it is a difficult strategy to argue with. 
 
Colin Lawson
Managing Partner
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Equilibrium Asset Management (A Limited Liability Partnership) is authorised and regulated by the Financial Services Authority. For more information, please go to www.fsa.gov.uk.