Rathbones' Coombs Takes Risk To Lowest Level In Strategic Growth

Within the 'equity risk' bucket, 98% of the positions are equities, 30% of which are covered by put options.

Overall, 60% of the fund is held in equities. Coombs sold the last remaining holdings in high yield in mid-August on the grounds the yields were unsustainable.

Among the equity positions, 18% is allocated to the UK, across nine stocks, seven of which are international earners, namely Rentokil, DCC, Ferguson, LSE, Shell, Unilever, ITV, Legal & General and Hargreaves Lansdown (HL).

Coombs admitted he was "struggling to find UK names we want to own", but bought into HL recently when the platform's share price fell on the back of the Woodford fund gating saga.

"HL is a uniquely good proposition," he said. "The platform is so hard to replicate - a competitor would need deep pockets.

"HL is way ahead; it would be difficult for other platforms to catch up. Their software is very powerful and the distribution is very powerful. There are not many UK companies with these kind of properties."

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Following the suspension of the LF Woodford Equity Income fund, HL's share price fell from £22.28 on 3 June to £19.00 on 6 June.

HL removed the fund from its Wealth 50 list and stopped charging investors in the fund a platform fee.

HL chief executive Chris Hill issued an official apology to investors and subsequently waived his bonus until the fund re-opens.

Commenting on the events, Coombs said: "Any supermarket has a product that goes wrong sometimes. You look at it and then move on. It is like a tin of beans at Sainsbury's that has gone off. It is buyer's choice."

Coombs bought into HL during the share price fall, which he said had proved profitable. The holding currently represents 0.8% of the fund, which is a typical position size, according to the manager.

"HL has not been horrendous for us. It is a good business, we had been looking at it for a while."

Over one year the fund has returned 3.41% against the 1.8% average of the IA Volatility Managed sector, FE data shows.