From Gold to Tech: Fund Manager McLennan Focuses on Real Assets

Thursday, 21 Jun 2012 | 3:53 PM ET
Jeffrey Collidge | Riser | Getty Images

As manager of a fund that has performed among the top 1 percent during the past decade, Matthew McLennan has outsmarted "financial repression" to outperform his peers.

"Financial repression" is the idea that investors today can't make real returns in risk-free assets. With monetary intervention as the common solution to global economic woes, investors face negative real returns over time.

"There is no risk-free asset that offers a real return," says Matthew McLennan, manager of the First Eagle Global Fund, McLennan made the comments during CNBC's "Street Signs" at the Morningstar Investment Conference in Chicago on Thursday. "Money has been corrupted," McLennan says.

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This backdrop forces investors to search for real returns including equities with a margin of safety.

Fund Manager: Money Has Been 'Corrupted'
Matthew McLennan, First Eagle Global Fund, says that in an environment where money has been "corrupted," you have to look for opportunities to generate real returns outside of traditional places.

McLennan's top holdings include gold and major tech names including Cisco and Microsoft .

The fund holdings' common thread is dominant businesses that own a small part of the global economy. "That's a real asset. Just like gold is a real asset," he said.

And if investors can own such assets at the right price, that strategy yields real returns over time, McLennan says.

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