High conviction
Taking into account that most of his clients’ portfolios are multi-jurisdictional, Reisbøl prefers to use funds that are available for sale in as many countries as possible. So his white list ends up being crammed with Ucits. But what sort of Ucits? “We prefer to go with slightly smaller managers, especially in the smaller asset classes. I prefer managers who get their returns from taking specific bets, and these often happen to be the smaller, non-benchmark driven managers. We don’t need well-diversified managers with 150 stocks anyway, because we run portfolios with 20 different funds.”
Asked to give an example of such a high-conviction fund, Reisbøl names a fund focusing on one very specific topic: the growth of the healthcare sector in China. “I like the Atlantis China Healthcare Fund ,in which we have been invested since April 2014, because it is the only Ucits fund investing exclusively in Chinese equities involved in healthcare development in mainland China, something we consider to be a strong, long term investment case,” he says.
However, active share in itself is not very important for Reisbøl.“Instead, we analyse how a fund performs in times of stress, and ask the manager how they acted in specific situations, for example, on a day with extreme market conditions. We might also ask them to explain to us why they did or did not generate alpha in specific periods.”
Playing it safe
That Reisbøl likes unconstrained managers does not mean he is fond of risk. Quite the contrary. “For us, it is not about finding the best funds in the market. Instead, we focus on avoiding the problems. Our funds don’t need to be first-quartile consistently. A good example is the Kames Absolute Return Bond Fund. They say their ambition is to just be a little bit better than the rest every quartile, but first-quartile over a rolling one-year period. If you approach it that way, your risk management will be sounder.”
