Veteran investment manager John Husselbee has used the recent volatility in Europe to top up selected European equities within Liontrusts’s multi-manager funds.
Mr Husselbee, who became head of the Liontrust Multi-Asset team in October 2013, said: “We believe that full-on quantitative easing in the Eurozone seems to be a case of when, not if, despite German opposition.”
He added: “For investors with the benefit of a longer time horizon that allows greater risk tolerance, we also think Asian and emerging markets equities appeal.
“So we have further reduced our bond holdings into this strength and we have used the proceeds, together with cash positions that we have built in recent months, to top up our exposure to equities with Japan and Europe.”
He said these were the team’s “preferred markets” with the prospect of central bank support ramping up rather than being tapered, and represent the best-value opportunities.
Ben Brettell, senior economist for Bristol-based Hargreaves Lansdown, said: “It looks increasingly likely the chancellor will be receiving a letter from Bank of England governor Mark Carney in the near future explaining why inflation has moved away from the government’s target by more than 1 per cent. Wage growth has also continued to disappoint.
“The prospect of recession in the eurozone – our largest export market – poses a severe threat to the UK’s recovery. Given the weakening outlook for global growth and the absence of inflationary pressure (both in prices and wages), I cannot see the logic in voting for higher rates at present. I expect them to remain on hold until mid-2015 at the very earliest, and possibly not rise until much later in the year.”