Philip Gibbs, manager of the Jupiter Financial Opportunities fund, admits to being more bullish on t...
Philip Gibbs, manager of the Jupiter Financial Opportunities fund, admits to being more bullish on the prospects for the market than he has been for the past three years.
Gibbs feels the end of the Iraq war was a good catalyst for equities and he became positive again on their outlook in March.
Consequently, he has upped the fund's weighting from nil to 14% in life assurance companies, increased his positions in stock exchanges from 2% to 5% and has been cutting back on the more defensive financial sectors such as mortgage banks and insurance underwriters.
He said: 'The life assurance companies in which I invest are not typically highly rated and will take some benefit from the global recovery as most of them are selling equity products.'
One area Gibbs is no longer playing is Lloyd's insurance companies, as he believes their valuations to NAV have become too high and they have a low exposure to equities on their balance sheets.
Added to this, he said, the underwriting rates of the Lloyd's companies will come down as they are high at present. As a result, he added, they will soon succumb to pricing pressure.
Some 28% of Gibbs's fund is in banks and while he claimed these companies will perform well, he feels they will not perform as strongly as life assurance stocks in an equity rally.
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