Stewart raises cash to 26% in £4.5bn Newton Real Return

Iain Stewart and Suzanne Hutchins have raised the cash position in the £4.5bn Newton Real Return fund to 26% in an effort to manage volatility in the portfolio.

According to Hutchins, hiking the cash level over the course of the year has helped protect the portfolio from dramatic swings in volatility. Some of this cash is diversified into near-cash assets including short-term gilts and US T-bills to avoid banking risk, she said. "We view cash as an asset class unto itself, and its role in the real return strategy has been to reduce volatility and manage risk in the real return strategy," said Hutchins. "Since it has been very expensive to 'protect' or insure the portfolio against absolute loss of value using put/call strategies, the cash posi...