JPMorgan Asset Management’s Tony Lanning said he will add to his US exposure given any future weakness in the market, in spite of growing concerns that the country’s stockmarket is overvalued.
The manager of the JPMorgan Fusion Multi-Manager range said his decision not to waiver from his positions in spite of recent macro headwinds had “proven broadly correct”.
“We believe investors are being rewarded for holding risk assets and that factor will continue to dominate the landscape in fundamental ways as central banks remain enormously accommodative,” Mr Lanning said.
“We have been overweight US equities while other managers may have been trimming positions. Staying invested in these markets in spite of doubts about the sustainability of the rally, notwithstanding what has happened with the debt ceiling and the government shutdown, has proven broadly correct over the course of the year.
“If we were to see a correction in US markets we would assess that as an opportunity to add risk to the portfolio at cheaper valuations.”
Mr Lanning has invested more than 40 per cent of his Fusion Growth Plus fund in US equities, backing products such as the JPMorgan US Select Equity Plus fund and Neuberger Berman’s US Multi Cap Opportunities fund.
He said managers such as Neuberger’s Richard Nackenson “may be poised to take advantage of the improving backdrop for active stockpickers”.
“Intra-stock correlations have fallen dramatically in the past two years and the market is waking up to recognising the importance of underlying valuations and company fundamentals,” Mr Lanning said.
This is in spite of the S&P 500 index leading most developed stockmarkets in terms of gains so far this year, with a return of 25.7 per cent. US managers this year have started to become concerned that earnings may not meet the levels being priced in by the market. Elsewhere in the portfolios, Mr Lanning has become the latest multi-manager to back a recovery in mining and commodities, having added a holding in the DB X-Trackers Stoxx 600 exchange-traded fund, which in turn has significant exposure to large mining companies.
The manager said the mining sector was “in the early stages of recovery and presents an interesting valuation opportunity”.
He added: “We think a turn in sentiment is underway in this unloved sector and that early movers may be poised to benefit.”
Mr Lanning joins leading multi-managers from Jupiter and Cazenove who have begun building up exposure to commodities and miners in recent months.
JPMorgan Asset Management launched the Fusion funds with Mr Lanning at the helm in March this year. So far the five portfolios have raised roughly £23m in assets.