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Wealth manager outlook: welcome to the 20mph recovery
by David Campbell on Sep 26, 2013 at 14:00
Japan followed Europe in positive conviction, with reported overweight positions up from 33.3% of managers to 57.9%.
UK equity overweights rose from 38.1% of managers to 52.6%.
US positioning seemed to reflect a perception that equity markets were at or approaching full valuation. Overweight positions edged forward from 47.6% to 52.6% but that was dwarfed by the increase in underweight positions from 9.5% to 26.3%.
‘We have been increasing our asset allocation towards global equities, in particular the UK, Europe and Japan where there are pockets of value appearing for differing reasons,’ said Peter Lowman, chief investment officer at the Investment Quorum.
Several managers emphasised the role of fund selection in screening geographic allocations for sectoral drivers of alpha versus broad geographical exposure, however.
‘European equity [offers the greatest opportunity], provided you use agile funds able to identify companies best able to profit from a tentative recovery,’ said L&P’s Moore.
‘Allocation within these broad asset classes will probably be a greater factor in determining success than headline over/underweightings,’ added Scott.
Property back in favour
The steady rehabilitation of property as an income-producing asset class continued over the quarter, with the number of managers reporting an overweight, rising from zero at the end of March to 14.3% in June to 31.6% in September. Underweights have steadily declined from a peak of 63% a year ago to 26.3% in September 2013.
‘My big question is whether the race for income will mean the market moves harder into property, as an alternative to lower risk debt,’ said Beckett.
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