Coombs backs concentrated portfolios in search for alpha

David Coombs, head of multi-asset at Rathbone Unit Trust Management, is cutting out all passive equity exposure across his fund range and buying concentrated, high conviction portfolios in an effort to add alpha.

The manager is concerned stock dispersion across equity markets is rising, particularly in the US, creating a bigger rift between fund management winners and losers. “We are overweight mid and small caps and have more risk now in this space than in the country allocations,” Coombs said. “We want very active managers at the moment.” This high conviction investment approach is most prominent in the US, where Coombs has recently bought the Brown Brother Harriman US Core Select and Edgewood US Select Growth funds, both very concentrated portfolios, with just 29 and 22 stocks, respectively...