Markets right now are even more extreme than they were in 2000, according to Platinum, with many perceived ‘safe’ stocks looking risky.
In an update to the $8.5 billion Platinum International fund, managers said 2000, the year that the dotcom bubble burst, was the best parallel for current markets.
This meant many stocks which were perceived as being ‘safe’ options were actually risky ones.
“What has appeared to many investors to be ‘safe’ could turn out to be very risky and vice versa. The closest parallel we can use to describe today’s markets is the year 2000. The only difference being that it’s more extreme.”
The Platinum International portfolio was dominated by companies in the decarbonisation, travel, technology and Chinese consumer while its short portfolio was dominated by those technology stocks which it viewed as being overpriced.
Top ten holdings included resources company Glencore, Samsung Electronics and Ping An Insurance Group.
The management team, made up of Andrew Clifford, Nikola Dvornak and Clay Smolinski, acknowledged this had led performance to be “languid”. Over one year to 31 January, the fund had returned 13.5% compared to returns of 23.3% by the MSCI All Country World index.
Performance had improved in the past quarter, however, with the fund returning 9.2% versus returns of 2.9% by the index.
“Our approach is about trying to avoid the hype, staying away from the crowd and we have talked at length about the risks in markets. While this has made us appear languid at times, it was a very deliberate approach which led us to enter this year very cautiously positioned on the basis that risks in markets were very asymmetric.”
