Jupiter's Clunie: Why I am shorting quality stocks in my Absolute Return fund

Unusual investor behaviour

Jupiter's James Clunie said investors are "making a mistake overpaying for quality stocks", which currently make up a net short position in his £478m Absolute Return fund against long exposure to value investments.

Clunie (pictured) said the "unusual behaviour" of investors favouring bond proxies is creating an opportunity for arbitrage for an absolute return investor, though he admitted it feels uncomfortable to go against the consensus. "It feels horrible, but we think long-term we are right," the manager said. "We are embracing the uncertainty, but this means we have to bear the pain. We think people are making a mistake overpaying for quality, so we are slightly net short." FCA probes absolute return funds as part of competition study For example, the manager is shorting quality stock Rém...