Rathbones’ David Coombs has said he expects the UK economy to “hover around recession” in the coming year.
By Jenna Voigt | Published 16:57 |
Article from FT Adviser
Mr Coombs, head of multi-asset investment at Rathbones’ Unit Trust Management unit, said while the sovereign debt crisis in the eurozone remained unsolved, fund managers will “muddle through until we have more visibility”.
He said there will be a “tricky” January and February, and warned the European Union (EU) could lose its AAA credit rating in the early part of 2012.
But in spite of his bearish outlook, Mr Coombs said he has “increased risk slightly” through Asian emerging economies and US stocks.
The manager said emerging Asia had significantly underperformed in 2011, but valuations were starting to look reasonable for the asset class, while the US equity market and US corporates appeared strong.
Mr Coombs added backing the US dollar was a core part of his strategy for 2012 and said he expected to see the dollar rally against the euro and gain slightly against the pound.
He said he pulled out of gold entirely earlier this month because he felt the “correlation to equity markets had been quite high over the past several months”. He warned the safe haven asset had become “range bound” and was “struggling to break through new valuation levels”.
“I’ve been a bit nervous about gold,” he said. "It’s had a hell of a run and you wonder how much further up it can go. In the short term I’d rather have money in US treasury bills than gold.”
Article from FT Adviser
