Platinum Asset Management has said it is opting to ‘sacrifice upside’ in order to avoid the worst of the losses caused by volatile stockmarkets and is taking ‘swift action’ to reposition portfolios.
The firm runs several funds including its flagship $9.2 billion Platinum International fund, managed by Andrew Clifford and Clay Smolinski.
Writing on Twitter after it cancelled its adviser roadshows to allow people to go into social isolation, manager Clifford said: “We took swift action when news broke of the virus and our net position in our flagship fund is only around 60% as is the Asian portfolio. Today [we are] identifying new targets to buy and likely reducing some of our shorts. [We] would sacrifice some upside in order to avoid loss.
“The issue for markets is around government action and the reaction of fearful citizens. The economy is land, labour and capital. With withdrawal of labour, economy shrinks as not put to work. Parallel is GFC. Impact significantly already – this is a recession.”
This cut to 60% was a further cut from a reduction in February when it moved to 69%, a level it said was close to historic average. Current allocation now included 22% in index shorts and company-specific shorts and 19% in cash.
Stocks Clifford felt were out of favour and could be ‘targets’ to buy included mineral firm First Quantum, resources firm Technip and Chinese firms Zto Express and WeiChai Power.
His colleague Dr Bianca Ogden who manages the Platinum International Healthcare fund added that Roche, Gilead and Moderna were all ‘well placed’ for their focus on diagnosis, treatment and vaccinations. Gilead and Roche were both already top 10 holdings in the $309 million fund at 3% and 2.4% respectively.
Performance of Platinum International fund versus MSCI ACWI index since the start of 2020 to 18 March, 2020
