Chatfeild-Roberts plays Middle East turmoil via energy funds

Jupiter's John Chatfeild-Roberts has introduced energy exposure into his £6bn Merlin multi-manager range to benefit from rising oil prices, driven by political turmoil in the Middle East.

CIO Chatfeild-Roberts says global energy prices are escalating fast and the civil unrest seen in Tunisia appears to have been the catalyst for the events in Egypt.

"This raises concerns other autocratic Arab regimes throughout Africa and the Middle East will be subject to similar protests.

"Our concern is Cairo's problems could spread eastwards and destabilise the region."

This could threaten oil supply and push the price per barrel to $150, he believes.

"We have therefore decided it is prudent to introduce a dedicated energy exposure across our range of funds."

The manager has introduced holdings in BlackRock World Energy and Guinness Global Energy to the funds in the Merlin range.

Meanwhile, Chatfeild-Roberts is selling down emerging market equities as inflation takes hold in these economies and the assets become a crowded trade.

"Emerging markets have become extremely attractive to a number of investors in recent years and they have generally delivered exceptional returns.

"What worries us today is many of these economies are now finding it very difficult to contain inflation, particularly those whose currencies are pegged to the US dollar. China is a great example of this," he says.

"Meanwhile EM equities have become the most popular consensus trade. We believe in the long-term secular growth story but we think it is probably time for us to take some profits."