Momentum CIO warns against relying on central bank support

Mike Allen, CIO and portfolio manager of the Momentum diversified growth fund, has warned investors against a reliance on central bank policies in the future.

Allen commented that investors need to ensure a variety of returns drivers are baked into their investment strategies in an environment where QE starts to be unwound. Diversification and a dynamic asset allocation approach were vital he added, if liquidity falls and volatility rises in the future. “We expect 2014 to be a more fertile ground for active stock pickers. While active management seems to have fallen out of favour with many investors, there remain areas of the market where active management can meaningfully enhance returns, such as opportunities in global and small-cap equity. In an environment which is less driven by extraordinary loose monetary policy, active management can provide a further source of additional return for your investment strategy,” Allen said.