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Digital Subscriptions > Portfolio Adviser > August 2017 > THE PERFECT PRESCRIPTION

THE PERFECT PRESCRIPTION

With quality stocks seemingly ‘priced for perfection’, Investec Wealth’s Andrew Summers diagnoses adding value and cyclical ballast as the best tonic for equity positioning

Asset allocator

In common with many investors, Andrew Summers, head of fund research at Investec Wealth & Investment, has a dilemma: the group focuses on quality, investing in well-run companies with little debt and predictable dividends, but he admits these stocks are now ‘priced for perfection’ in a world that has seen nervous investors stick to safe-haven assets.

“Philosophically, we have a quality bias because we believe it is what private clients want,” he says, “and they could certainly outperform more cyclical equities during a selloff. In the long run we believe quality provides solid returns with less risk. However, we recognise they have done very well.”

While a sell-off in equity markets remains a possibility, it is by no means assured and Summers is reluctant to be over-exposed to expensive quality stocks just in case. As such, the group has been adapting its focus on quality since the start of the year.

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About Portfolio Adviser

This month we look at investing in Asia, 20 years on from the region’s crippling financial crisis. We also chart the move into alternative assets and ask if the sector is verging on bubble territory, and we find out why doing nothing in a portfolio is often the best investment strategy of them all.
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