GLOBAL - Fund management houses are beginning to dip their toes into riskier markets as investor confidence begins to return.
Industry experts are seeing this as an opportunity to get outperformance from less defensive equity markets.
Pacific Basin ex-Japan and emerging market sectors are expected to gain at the expense of UK equities.
Gartmore Investment Management market economist Jamie Lewin said the firm was positioning itself in these areas, and slightly increasing its US equity position.
He said: “There will not be stellar growth, but it will be sufficiently robust that we do see genuine rotation at the sector level into more cyclical stocks as they do better in this environment.”
The Japan sector was excluded from the shift. Lewin said that he had concerns about structural problems still afflicting the country, despite the fact it historically performs well in market upswings.
But Axa Investment Managers global investment strategist Nigel Richardson sees Japan as a good bet.
He said: “I believe we are seeing history repeating itself. We are where we were roughly in autumn 1998 when the markets bottomed in Japan and subsequently rose by about 60% for the following year.
The reason was that the global economy went into an upswing again as well as a pro-cyclical boost to activity coming from the government.”
He also predicted that Euroland would see some outperformance, but that it would lag behind Pacific areas, Japan and emerging markets.
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