Aegon Asset Management UK has moved £300m out of the Japan and US and into UK and European equities....
Aegon Asset Management UK has moved £300m out of the Japan and US and into UK and European equities.
The aim is to weight developed market exposure more equally across its global portfolios. This move involves 1.76% of the group's £17bn equity assets under management, but as Aegon only overweights a market by a maximum of 3%, it sees this move as significant.
This follows a shift in global strategy that has seen Aegon upgrade its view of the UK and European markets from neutral to positive.
Aegon continues to expect good returns from equity markets, according to Alistair Byrne, head of investment strategy at the group. Following the strong performance of the US and Japan, he said there is little reason now to differentiate the prospects of the major markets.
Byrne said the group's positive stance on equities has been motivated by two factors: declining interest rates and attractive valuation levels.
He added: 'Economic policy has moved in the right direction in recent months. The US Federal Reserve has been very aggressive in cutting interest rates, and central banks everywhere have followed suit, with even the previously stubborn European Central Bank now seeing the need to reduce rates.
'Overall, valuations remain attractive, despite the recent rally in markets. We expect the FTSE 100, for example, to grow to around 6,400 by the end of the year, which is a 10% increase.'
Bond yields, Byrne said, have risen to levels that are closer to fair value, but returns from bonds are still likely to be outpaced by those from equities through the remainder of 2001.Investment Week 4 June 2001
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