Darius McDermott at Chelsea Financial Services and FundCalibre shares his insights on the case for tech-driven emerging market and US equities, as well as for investment trusts and gold.

The US-Iran clash and closure of the Strait of Hormuz has roiled energy sectors, but markets have been more resilient than analysts predicted, a prominent UK financial advisor figure says.

Darius McDermott, managing director at Chelsea Financial Services and FundCalibre, said in an interview that technology hardware has been a strong sector, driving a surge in Asian and US markets this year - although there was a setback in July.

A top holding for McDermot in his VT Managed Chelsea Funds is the London-listed Polar Capital Technology Trust, which has heavy AI exposure. The trust invests in global technology, including in emerging markets and Asia, Europe and the US. Examples of holdings include Taiwan Semiconductor Manufacturing Company (TSMC) and US tech giants Nvidia, Alphabet and Apple.

McDermot is managing director of the VT Managed Chelsea funds which cover a range of risks, depending on the type of investor. They include the VT Chelsea Managed Cautious Growth fund, the VT Chelsea Managed Balanced Growth fund and VT Chelsea Managed Aggressive Growth fund.

Like a number of investment managers, McDermott said he has raised his exposure to emerging markets and Asia over the past 12 months. He thinks they have further to run. Seventy per cent of emerging markets are in Asia. McDermott has also kept a heavy exposure to US equities in his funds (nearly 40 per cent) and kept a gold position, which he sees as a safe haven in volatile times. Emerging market central banks continue to build gold reserves.

The investment industry figure said he has bolstered his exposure recently to his energy exchange-traded funds to hedge inflation risk and higher oil prices. His renewable energy positions have also been performing better this year, McDermott said. He also maintains a preference for investment trusts. (See more here about investment trusts.)

VT Chelsea Managed Cautious Growth fund
The fund aims to produce growth over the long term, but with lower volatility than equity markets. While returns may not be as high as in the aggressive fund, investors will take less risk. The fund invests in UK and overseas equities, although it will also invest in other assets including bonds, alternative investment trusts, gold and targeted absolute return strategies. Exposure to assets is typically via open-ended funds, investment trusts and exchange traded funds.

The fund has outperformed the IA Mixed Investment Shares Sector over the past five years, with some of the equity funds such as Jupiter Asian Income performing well recently. Top holdings include Invesco Physical Markets, Artemis Short Duration Strategic Bond, iShares MSCI World Energy Sector, Polar Capital Technology Trust, Guinness Global Equity Income and Jupiter UK Special Situations. The fund is heavily exposed to the US (35 per cent), followed by the UK (26 per cent), Europe ex UK (20 per cent) and Asia ex-Japan (11 per cent).

VT Chelsea Managed Balanced Growth fund
The fund, which has outperformed the IA Mixed Investment Shares Sector over the past five years, aims to grow money over the long term, striving to build a portfolio with lower volatility than equities. It invests in UK and overseas equities, although it will also invest in other assets including bonds, alternative investment trusts, gold and targeted absolute return strategies. Exposure to assets is typically via open-ended funds, investment trusts and exchange traded funds.

Top holdings include Invesco Physical Markets, Polar Capital Technology Trust, iShares MSCI World Energy Sector and Artemis UK Select. The fund is heavily exposed to the US ( 39 per cent), followed by the UK (21 per cent), Europe ex UK (16 per cent) and Asia ex-Japan (12 per cent).

VT Chelsea Managed Aggressive Growth fund
The fund, which has outperformed the IA Mixed Investment Shares Sector over the past five years, aims to grow money over the long term, investing heavily in stock markets around the world, making it more volatile than his other funds. The fund invests up to 100 per cent in UK and overseas equities, although it may also invest in other assets including bonds, indirect property, gold and targeted absolute return strategies. Exposure to assets is typically via open-ended funds, investment trusts and exchange traded funds.

The strongest performer recently was the Guernsey-headquartered investment trust Schiehallion, managed by investment manager Baillie Gifford. It has recovered from trading on more than a 50 per cent discount a few years ago to a premium today. The trust owns eight out of the 10 largest private companies in the world and has significant positions in Space X and Anthropic. It has risen 40 per cent year to date.

However, India, a strong long-term performer for the fund, has struggled amidst higher oil prices and a weak local currency.

Top holdings include Polar Capital Technology Trust, Chikara Indian Subcontinent, iShares MSCI World Energy Sector and Artemis UK Select. The fund is heavily exposed to the US (39 per cent), followed by the UK (21 per cent), Europe ex UK (15 per cent) and Asia ex-Japan (10 per cent).