Wealth manager Walker Crips has reduced its exposure to the equity market, with chief investment officer Mark Rushton saying valuations were unattractive and it was time to reduce investments in most of those areas.
Mr Rushton said equity markets had enjoyed a strong run of performance in recent years, but apart from holding more than the market average in Japanese and Asian shares, the firm has been switching clients into absolute return funds instead.
Overall, the CIO said he had slightly less than the market weighting to UK equities, with investments being held in defensive funds.
He has the same weighting to US and Emerging Market equities as does the market as a whole. The biggest area he has been reducing exposure to was European equities.
Mr Rushton said there was "exuberance" about the prospect for European equities and the economic outlook but the economic data told a different tale.
He said: "Unemployment is rising in France, and money supply growth is slowing, we started to sell European equities in March and have kept doing so."
Instead, Mr Rushton is keen on Japanese equities. These shares are often popular with investors seeking defensive exposure in portfolios because the Yen, the Japanese currency, often strengthens when markets are weak. This increases the appeal of Yen based assets to investors in other markets.
But Tom Sparke, investment manager at discretionary fund management firm GDIM in Cambridge, said he was keen on European equities over UK shares.
He said UK shares carried a risk that he did not feel was necessary to take when other equity markets carried fewer risks.
Mr Sparke also invests in Japanese equities through the Baillie Gifford Japan fund.
david.thorpe@ft.com
