Here are some highlights:
What are the advantages of holding a fund-of-funds rather than a multi-asset fund?
GP: Picking a handful of securities is far more risky, as fund of funds have a double layer of diversification. Also fund of funds are far more tax efficient.
Performance has been disappointing of late. Which sectors have acted as a drag on performance?
RB: Certain stock pickers have added less value than expected, due to the increased significance of political policy. There has also been some sector specific issues, but in the long-term we’re not too worried. I’d also point out that not all funds have underperformed – the Distribution fund has been a notable performer.
Do you think a Greek/Spanish default is priced into the markets? RB (pictured right): If you’re talking about a full default then no – there would definitely be unexpected ramifications. Spain is certainly more of a concern for markets than Greece though.
Are there any sectors that you’re struggling to find good funds in?
GP: We always have ideas, but fixed income is proving more of a challenge in portfolio construction terms. In this area, knowing who has the most flexibility and who can use it best is key. We try to stack the odds in our favour and fund size is usually a drag. Woodford, for instance, has proved he can generally overcome this but we believe he may not always do so.
What is your single favourite holding across your portfolios?
GP: It would have to be Findlay Park American. In the US market, no others come close.
What manager (apart from yourselves) would you entrust your savings with? RB: There are a number of tried and tested managers but Angus Tulloch or James Findlay would be right up there.
If you were to buy just one of the funds you manage, which one would it be?
GP (pictured left): For the longer term it would be the equity biased Thames River Global Boutiques fund.
Are client expectations too high? What is a reasonable annual return over the next decade?
RB: If anything I think they might actually be too low. I would investors can expect high single digit returns in the next 10 years.
What would happen if interest rates became negative?
RB: There’d be even greater focus on quality income products. For our business, I’d expect demand for our Distribution fund to be even higher.
Ruffer’s Steve Russell thinks inflows into income stocks could become unsustainable. Do you agree?
GP: Absolutely not. Equities look best asset class of choice for long term. Income discipline is a positive.
How much further do you think the deleveraging process has to go?
RB: Deleveraging has only just begun and will go on for many years, but that doesn’t mean markets can't make good progress.
Click here for our first live twitter interview with small-cap expert Gervais Williams.