Managers of Insight Investment's multi-manager offering say they are switching to large cap funds following last year's outperformance by smaller and medium-sized stocks.
The UK equity market is poised for a good year all round says Patrick Armstrong, director fund and manager selection, and companies with improved balance sheets will provide high yields.
Europe and the Pacific region should do well too.
However, Armstrong and colleague Ana Cukic-Munro, director portfolio strategy and construction, say the US could run into difficulties because of the employment issue.
Job growth has stagnated despite a mass of liquidity injected into the market under George Bush’s administration but this is yet to result in significant improvements in demand for labour.
The low dollar is another risk to that economy, they suggest.
Nigel Whittingham, managing director multi-manager, says Insight will use its proprietary quantitative analysis tools and qualitative research to switch holdings to reflect these changing markets.
This frees IFAs up from having to manage clients’ portfolios, while offloading associated risks – such as litigation against investment advisers, which is on the increase in the US, he says.
Whittingham adds although the multi-manager sector still does not have a long past performance history from which to draw comparisons with long-only sectors, the performance figures over the past five years do compare favourably.
Levels of professionalism are rising in the multi-media sector and it is becoming easier to provide the evidence required to persuade intermediaries of the benefits of the multi-manager approach, he says.IFAonline
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