Dennis Stattman is good at dodging bullets. As a senior portfolio manager at Merrill Lynch Investment Managers, he has eked out handsome profits in some of the trickiest markets seen in years.
'It has been a very good five years,' says the manager of the Global Allocation fund. That is an unusual statement, considering this period spanned the dotcom bust and the worst equity bear market since the 1930s.
But the Princeton-based Mr Stattman seems to have a magic touch when it comes to being in the right investments at the right time. The Global Allocation fund veers from the benchmark and that flexibility helped it ride out the equity bear market in early 2000 by being conservatively positioned.
It survived the dotcom bust thanks to Mr Stattman's staunch refusal to be drawn into the preceding boom - though he says the constant questioning of this strategy by investors made it one of the toughest periods in his 20-year investment career.
The fund's performance wobbled in 2002 due to an early shift back into equities, but this paid off and delivered a 39.1 per cent return last year. The fund also benefited from moving into high-yield debt in late 2002 before it was popular and when it still paid well to be there. It also underweighted the dollar in favour of the euro.
'While we didn't suffer much on the downside, we got every bit of the upside that some of the aggressive investors got,' Mr Stattman says.
How is Mr Stattman positioning the fund in the present environment? The answer, unsurprisingly, is against consensus. At a time when many cautious investors are finally being lured back to equities on the back of stronger economic data, Mr Stattman, who has worked with the fund since 1989 and led it since 2002, is getting defensive.