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Volatility and banking problems may have spooked the markets, but that is no reason not to shift portfolio holdings, according to Jamie Hooper, manager of the Axa Framlington UK Growth fund.

Mr Hooper said 18 September was the date of capitulation in the market and time to start investigating stocks to buy, and he has switched his view from cautious to balanced. While some investors viewed the day as a potential 9/11 of the financial markets, Mr Hooper said the panic selling matched the behavioural market cycle and could actually prove to be beneficial over the long term.

He said: "In terms of the behavioural market cycle, investors have already panicked, so we are now reaching the point of maximum financial opportunity and reaching a more positive position for recovery."

Mr Hooper took over management of the £94m fund in December 2006 and set about restructuring and putting his own stamp on the portfolio. Among the changes made were the introduction of greater conviction to stocks and an increased large-cap bias that now sits at 70 per cent.

The manager said the portfolio is now more balanced than it has been. The fund is now about conviction, not hugging the index, he said, adding the lifecycle of returns was more important than sector categories.

Overall, he maintains a contrarian approach to management, and while he had a cautious portfolio since the third quarter of 2007, Mr Hooper said he was now adopting a more neutral view while most other managers were becoming more conservative.

Stocks he is particularly keen on at the moment include budget hotelier Whitbread, which is 1.6 per cent of the fund, and ITV, which is 1.3 per cent of the fund.

"Whitbread currently owns Premier Inns, which has seen a surge in profits since businesses have been downgraded," he said. "The group's corporate business has been doing very well, as businesses in general have been cutting costs and using Premier Inns to house staff and hold conferences, while before they would have used more expensive hotels.

"ITV shares collapsed because of the cycle. However, Sky currently holds 17 per cent of the company, but has been ordered to release 10 per cent of its shares back onto the market. A number of businesses have already expressed interest in this 10 per cent, including Goldman Sachs and Netherlands-based production company Endemol."

As for the US, Mr Hooper said it appears the seeds of a recovery have been planted by factors such as falling mortgage rates, easing inflationary pressures and greater earnings visibility.