Morningstar against raising financials exposure

Analyst Ash Kumar believes investors contemplating “bargain hunting” in this crisis-ridden sector should remember UK equity funds are often heavily weighted to financials, as these companies represent nearly 25% of the FTSE All Share ex Investment Trust index. Kumar says any fund focused on a narrow sector is “inherently riskier” than a broader offering. “Those risks loom especially large in the financials group given the continued uncertainty in financial markets and the prospect of recession in the US,” he says. “Financials may look cheap on past earnings, but they're cheap for a reaso...