Low market turnover, high valuations, high cash balances and a lack of buy ideas suggest market risk is skewed to the downside

Livewire Exclusive

Livewire Markets

Low market turnover, high valuations, high cash balances and a lack of buy ideas suggest market risk is skewed to the downside. That's the view of Justin Braitling, CIO of Watermark Funds Management, who operates a 'market neutral' or 'long short strategy'. Braitling says, long only managers are siting on their portfolios and hoping that the markets, supported by liquidity measures, will continue to grind higher. If you look at turnover levels... the trends are quite concerning. Market turnover has fallen away quite dramatically this year. While long only managers are struggling to find new ideas, Braitling says their long/short strategy is providing plenty of opportunities - mostly on the short side. Interestingly, Mercer just published their fund performance tables for FY14 - with the best performing fund being Regal Funds Management who delivered a 38.8% return via a similar long/short strategy. Braitling explains where he is finding opportunities:


Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.