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Eden upbeat but remains cautious
Investors have started 2012 in a more optimistic manner than at the end of 2011 but the market could soon move downwards, Eden Financial’s multi-manager team has warned.
An outlook report from Mark Harris and Chris Jaques, managers of the £65m Global Multi-Strategy fund, said high volatility was going to stay for a while.
The report said: “We anticipate better economic news and sentiment in the medium term.
“A resurgence of US home builders by 60 per cent from the October 2011 lows has been an important indicator. The sector has been a 14 per cent drag on US gross domestic product and this is an encouraging sign that the rot has stopped.”
However looking at “bear points”, it said: “We are cautious that the positive sentiment in Europe could breed complacency and expect a few twists and turns before the year is out”.
The managers said they liked corporate bonds but felt government bonds were poor value. They also favoured energy mid caps for equities, but warned there were questions about how companies would use cash stockpiled on their balance sheets.
The outlook said: “The fundamental data has been good. The markets are therefore well set in the medium term but, after a strong January, we expect some reversion to the mean.”
The Global Multi-Strategy fund, launched in 2008, has returned 33 per cent in the past three years, compared with 30.2 per cent for the IMA Mixed Investment 20-60 per cent shares sector.
