Platinum increases $6b International fund's cash levels

The opportunities in markets are less “mouth-watering” than people expect, according to Platinum, which is leading its flagship International fund to hold almost a quarter of the portfolio in cash.

The $6.7 billion Platinum International fund had a low invested weighting at 56.2% and 23.7% in cash, up from 18.5% in May, which had been steadily rising over the year, last June it had 79% invested and 14.7% cash.

The firm said the cautious positioning, which also included a reduction in short positions from 28% to 20%, reflected concerns about the impact of rising interest rates and future volatility as markets moved away from a near-zero interest rate environment.

It did not feel this was the time to be buying assets and indicated it would hold this cautious allocation for the timebeing.

VIEW ALL

View all

Co-chief investment officer, Clay Smolinski, said: “I would say there are more opportunities than there were, but they are not mouth-watering yet as we still have this hangover from the very distorted COVID-19 spending. You can point to some big falls in these hot areas, but given that the starting valuations were so wild, there is less opportunity than you might first think.

“There are also still opportunities to short. There are some incredibly dubious companies running lossmaking business models that are completely reliant on capital market funding, and we think that funding will be much harder to come by over the next 12 months.

“On balance, while things are starting to get interesting, we're not quite ready to phase out the short book and cash entirely just yet, but we are ramping up our buying activity.”