Why Barclays thinks now is the time to buy US shares

Barclays Capital's flagship asset allocation Radar fund has piled into equities on the back of a market correction, with its research team citing fear rather than fundamentals for the recent sell-off.

Radar, which was launched in 2009 and is essentially a long-short macro tactical asset allocation fund.

Radar's equity exposure has significantly increased in the last two months, rising from 39.2% at the end of April to 69.3% at the end of May.

As part of that decision, Barclays Capital research team has invested 28.3% of its equity weighting into the US, believing the fiscal problems in Europe will impact the US less than other parts of the world.

Nathan Bance, director in UK investor solutions at Barclays Capital, believes Germany's move to ban short selling of bonds had spooked the market. However, he said Barclays Capital continues to hold a cautiously bullish view on markets, driven by economic fundamentals continuing to help the case for further rises in risk assets.

He added: 'Also contributing to the allocation calls was the research view that the fiscal issues within Europe were likely to push back monetary tightening at key Central Banks.  

'For these reasons Barclays Capital Research has recommended initiating a 28.3% position in US Equities as the research team believes the US market should be less affected by European Union concerns and likely to benefit from improving economic fundamentals.'

Radar was up 7.3% since the start of the year and has returned 22.1% since inception in February 2009.