The US remains promising

23 October 2014

A stormy climate has dominated markets over the past few days, which this is precisely why, pausing to reflect on the widespread agitation, we unearth ideas that help us decide what our next few moves should be, according to Michele Gesualdi, head of the Kairos multi-manager fund management team that focuses in particular on the strategies adopted for KIS America. “There was a dip in early October that generated various opportunities, giving us the chance to restructure the portfolio around the edges. The asset allocation moves adjusting our target in light of current dynamics proved savvy, as demonstrated by the fact that the Fund’s performance was substantially flat last week, while the S&P500 lost 1%.”

What are the most significant changes? “Midway through last week, we increased the portfolio’s beta to reflect our view of the very violent drop that unfairly penalized certain sectors and stocks. This was achieved mainly by exploiting the declines in energies and consumer discretionaries, the two sectors in which we have grown the most while partially scaling back on financials, which in any case are still overweighted. Indeed, we deem it strategic to focus on the areas in which opportunities are now more tangible”.

In a situation as fluid as this, Gesualdi sees some solid ground as well, including the fact that “US equities still offer a lot of room for maneuvering, a reason why we believe the Fund should always be invested. Furthermore, KIS America continues to be overweighted in small and mid caps with respect to the benchmark, a choice that is mainly due to our conviction that stock pickers, and especially the most active stock pickers, will always tend to be positioned this way.”

The future? “We believe that the Fund’s momentum has changed, but for the better. Nevertheless, we will continue to make any necessary adjustments.”