Fidelity Multi-Asset Strategic fund manager Trevor Greetham is keeping his underweight positions in equities and property as the world tackles ‘stagflation' difficulties.
The £39m fund remains overweight in commodities, bonds and cash – with no changes expected until world markets stabilise.
Greetham feels ‘stagflation’, the combination of weak global growth and rising inflation, helps explain the success of commodities and bonds in Q1 this year.
The fund was down 1.91% in the first quarter, compared to the 2.84% benchmark loss.
“The new quarter is starting off on a strong note for stocks but bear market rallies are often short-lived,” he says.
"I remain underweight equities and property with the overweight distributed across commodities, bonds and cash. Sector exposure is tilted away from financials.
“However, it can only be a matter of time before slower global growth leads to weaker commodity prices and a return to the reflationary phase of the economic cycle.
"At that point, I am likely to shift the underweight focus of my equity holdings to industrials.”
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