Portfolio Manager Perspectives

Jeff Benjamin

Game plan for 2010? Play more D, WBI's Stroik says

Manager moving to defensive lineup, including health care, utilities, defense contractors, T-bonds and cash

Feb 3, 2010 @ 5:16 pm

By Jeff Benjamin

After enjoying the “beta rally” of 2009, investors should view 2010 as more of a defensive play, according to Gary Stroik, chief investment officer at WBI Investments.

“Our screens are favoring more-defensive investments, and I expect that's where we'll be putting our money for a while,” said Mr. Stroik, whose firm manages $355 million in subadvised portfolios for financial advisers.

“In January, we built up some cash by liquidating positions in emerging markets, energy and commodities,” he said.

The more defensive portfolio positioning now includes an increased emphasis on health care, utilities, consumer staples, defense contractors, Treasury bonds and cash.

“You have to look at what's going on, and you have to be able to respond to the changes,” he said. “Right now, the economy is kind of walking down a tightrope that has stimulus spending and inventory restocking on one side, and high unemployment and housing as a drag on the other side.”

Mr. Stroik said his approach to navigating that narrow path over the next few months likely will involve “moving money between the two areas as the market changes.”

“The market leaders could easily change from week to week,” he said.

Some of the stocks Mr. Stroik owns in the more defensive strategies include AstraZeneca PLC Ticker:(AZN), Lockheed Martin Corp. Ticker:(LMT), NV Energy Inc. Ticker:(NVE) and Kimberly-Clark Corp. Ticker:(KMB).

Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit InvestmentNews.com/pmperspectives .

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