Investors don’t pay us to invest in cash - Maia

Maia Capital’s multi-manager team are shunning cash and keeping their portfolios fully invested despite volatile markets.

The Resolution Asset Management boutique’s founders, Chris Ralph, Simon Mungall and Jason Collins argue weaker markets tend to produce a wider range of returns for skilful and disciplined fund managers to exploit.

They say the underlying managers in their Growth, Balanced and Cautious portfolios would fail to fully benefit from the opportunities they unearth if the capital allocated to them was reduced.

The trio also believe their investors are paying them to stay fully invested and keep cash weightings down.

The managers, who recently interviewed more than 50 fund managers during a trip to Asia, have added several funds to their portfolios.

In the Cautious fund they have bought the Marshall Wace TOPS UCITS fund, which is a market neutral fund that draws on the expertise of 1400 brokers as a diversifying source of alpha. More funds are expected to be added to this fund by late March.

Meanwhile, in the Growth and Balanced portfolios they have added the Melchior Japan Opportunities fund, managed by FuNNeX Asset Management.

Following recent meetings with the company and manager in Toyko, the Maia team is confident the fund, which has previously underperformed, will add significant value following extensive quantitative analysis.

Mungall says: “In current market conditions we think it is a question of holding your nerve and staying invested.

"We are not trying to call short-term moves - investors do not pay us to hold cash - we are simply doing what we say we are doing, which is buying funds with managers who take enough risk to genuinely add value.

"Looking for uncorrelated sources of alpha is key for us and we go to great lengths to ensure that is what we are buying - not beta in disguise.

“We think taking a strategic, long-term view is vital, which in our case means backing good fund managers to do their jobs and looking for relatively unusual funds to invest in, as demonstrated by our recent changes.”