Fidelity has dismissed fears of a double-dip and has urged investors to look beyond scare-mongering headlines and place economic figures in context.
Amid fears the US and other major Western economies face a double-dip recession, US equity managers at Fidelity say such concerns have been overplayed and economic data indicating negative trends is misleading.
Manager of the Fidelity American Special Situations fund Adrian Brass says it was inevitable the initial strong upturn in growth following the recession was going to slow.
"That pace of recovery was never going to be sustainable," he says. "Those who think the economy could continue to expand at the same pace are still blinkered by the artificially high growth experienced prior to the financial crisis.
"That growth was only possible because of leverage. Now we are still in the middle of a period of deleveraging that will see lower spending and higher taxation."
He says investors must shrug off double-dip fears and seek good quality secular growth companies. Within financials, Brass thinks larger banks will perform well as the credit cycle progresses. Although his fund is underweight on financials, Wells Fargo and Citigroup are both top ten holdings.
Meanwhile, Aris Vatis, manager of Fidelity's American fund, says the minefield of data supposedly painting a negative economic picture needs to be more closely scrutinised.
With regard to unemployment data, which at first sight might seem negative, Vatis says there is variation between different sectors. He points to increased hiring in some professional services with more people being employed in financial services and the temporary contract space.
He adds the weakness in the housing market is just an abnormality caused by the end of a tax credit for new buyers and thinks a sustained downturn is unlikely.
"We must remember, the US market is about much more than just the US economy. It truly is a global market," he says. "Hundreds of US companies are also global leaders, offering exposure to both domestic and international trends."
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