Anthony Bolton's Fidelity Special Situations successor Sanjeev Shah has increased exposure to banking stocks despite the sector playing a significant role in the worst ever year for the FTSE 100.
Shah says he has bought into a "basket of banking stocks" to spread the risk in his vehicle, while adding in the consumer cyclical space.
Banking stocks, along with the mining sector, were the hardest hit of FTSE blue-chips in 2008, contributing to the index's 31.3% decline.
Fidelity International analysis showed HBOS was the worst performing leading stock, down about 90% over the year, followed closely by RBS. Banking compatriots Lloyds TSB and Barclays were also in top 10 laggards.
Miners were heavily punished, with four stocks in the sector among the year's ten worst performers.
However, new FTSE 100 entrant, miner Randgold Resources, bucked the trend - delivering a 57% return. British Energy (up 48%) and AstraZeneca (32%) were the next best stocks.
While doubts linger over the FTSE's ability to rebound in 2009, Shah remains confident on New Year prospects.
"The rising spread in valuations between sectors and within sectors is creating a great bottom up stock picking environment," he says.
"We may not have passed the trough for stocks yet and the economy is likely to be in recession for some time but analysis of fundamentals leads me to be more optimistic about stock market opportunities than I have for a while."IFAonline
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