UK - Investors should look to smaller US banks for solid investment opportunities, Hiscox Investment Management says.
The fund manager believes pension funds have failed to take advantage of this asset pool, which constitutes the “heart of the US economy”.
Hiscox US financial fund manager David Astor said the sector was in a “solid position” following the banking crisis in the late 1980s and early 1990s.
Two local authority funds already invest in Hiscox’s US financial fund, which invests in a range of 25-30 US regional banking stocks.
Astor said: “People think of crooked investment banks, but these banks are small, home-grown businesses. If you believe in the US economy, you ought to be investing in banks.”
Astor conceded that there had been a gradual deterioration in the US economy but stressed Hiscox has positioned itself for US recovery.
Investors, driven by depressed interest rates, slower global economic growth and rich equity market valuations are examining non-traditional investment opportunities.
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