A 14-minute watch.   

In our latest Octo Selectors Series video interview, James Klempster, investment management director at Momentum Global Investment Management, talks Gary Shepherd through his due diligence in picking funds, and outlines why an equity downturn may not be as close as people think. 

Fund capacity is a huge issue today, with investors wary of fund managers running ‘supertanker’ funds, which arguably prioritise asset manager profits over clients’ interests.

James outlines the work behind picking managers: “Whatever we get told what the capacity is, we then inflate the current and historical portfolios by that and we can look and see if what they are holding today could be repeatable on a bigger scale, and if not the question comes: well what would you do differently, and how can you justify that capacity?”

James also explains why he still broadly neutral on equities, despite having his lowest weighting in the asset class in five years.

“We don’t have as negative a view as some. Markets have gone up for 10 years, but there’s no euphoria, no hubris, and no over extension of valuations. The economies continue to grow, albeit slower. Manufacturing is in a recession admittedly, but everything else is still ticking over okay. Consumers have still got cash, most of us have still got jobs and are still spending, and the corporate sector remains in good shape.”

More from James can be found in our long-form Octo Selectors Series interview here. 

Want more wealth manager videos? Click on the links to see interviews with Tim Cockerill, Dean Cheeseman, Ben Seager-Scott and David Coombs.