Offshore Capitalist

Sell bonds to hold cash and equities, urges Barclays star

Tim Bond, the Barclays Capital fund manager and head of asset allocation, is warning investors that the market risk is on the upside.

Bond, who in the past two years made the right call on the credit crunch and the equity rally which begun in March, said that even his own overtly bullish expectations are being surpassed. As a result, he is now fearful that if the recovery overshoots, the government support may be scaled back.

Bond said: ‘The key risks seem skewed towards the recovery proving stronger than even we are anticipating, resulting in an early shift away from easy policy settings. The net result of this outlook is that we advise reducing bond exposure in favour of a cash-equity barbell.’

Bond expects a symmetrical recovery in many sectors of the economy, with the exceptions of the US Labour market and the household savings rates.  He also assumes the slow closure of the output gap will see official rates in the US remain unchanged until next September, and in Europe until 2011.

‘Such conditions – strong growth and easy monetary policy – are typically and unsurprisingly very bullish for financial assets, equities and emerging markets, in particular.  However, we would readily acknowledge that history suggests considerable upside risk to our nearby growth forecasts, with a more symmetrical recovery a plausible outcome.’

via Sell bonds to hold cash and equities, urges Barclays star | Fund Selector | Citywire.

Related posts:

  1. A Balanced Fund For Bonds and Global Equities
  2. An Emerging Market Bond Fund
  3. Rathbones Economic and Market review – Julian Chillingworth
  4. Factors that favour the crude oil bulls
  5. Institutions to target Asian equities
  6. World Economy Continues to Defy the Pessimists
  7. China rounds on U.S. rates as global economic risk
  8. Reasons to sell out of emerging markets?
  9. Latest Fund Asset Statistics from EFAMA
  10. India economy grows 7.9%, shatters forecasts
  11. Shares will rally further – the top managers say
  12. Best performing sector this year may not be what you think…
  13. China won’t sell dollars to buy gold
  14. Global recovery better than expected – IMF
  15. Emerging Funds Resume Record Inflows, Shrug Off Dubai
  • Welcome to Offshore Capitalist

    Do dramatic financial headlines every day drive you crazy? Forget them! Drop by Offshore Capitalist every now and then to catch the useful stuff.