A 17-minute watch. 

John Chatfeild-Roberts, head of strategy for independent funds at Jupiter, and lead on the Merlin multi-manager range, had plenty to say on liquidity, ESG and growth versus value, in the latest in our Octo Selectors Series interviews. 

In an age where active funds are under scrutiny over their costs and performance, John talked up the benefits of simplicity and finding managers with the “extra edge” who really want to do the best for their client base.

“You need to keep turning the stones over. Most of our managers are pretty experienced and have been around for a long time, but we are always trying to find the next new ones,” he explained.

The Merlin portfolios are built roughly with a third in value managers and two-thirds in growth, and John explains why it’s been such a tough decade for the former.

“The best value managers have managed to hang on in there, but essentially with low interest rates, virtually free money, quantitative easing, and low bond yields, it’s meant that companies which can show growth can command a higher and higher multiple,” he says.

“We do know good value managers out there, but they are finding it really hard at the moment.”

On the big topic of the day, liquidity, John tells me he’s “obsessed” with being on the front foot of checking funds.

“Where we’ve got a fund that is relatively illiquid, we’ve got to have very good reasons for holding it, and we shouldn’t hold it in the wrong quantities,” he explains.

“Where are the pockets of illiquidity in these markets? There’s a Warren Buffett phrase ‘when the tide goes out you can see who wasn’t wearing any swimming trunks’ and 2008 showed this. Liquidity in those situations always tightens up so you just have to keep your eyes open”.