Fund manager Govett says because of increased exposure to defence stocks, its US opportunities fund is well-placed to weather a war against Iraq.
While quick to point out it still does not believe war is inevitable, manager of Govett's fund Gil Knight says the fund is lean enough to survive a war in the Gulf region.
The fund has recently increased its exposure to United Technologies and CACI International, both of which have interests in defence electronics.
Knight says: “Opinion is still divided as to whether a confrontation with Iraq would be short or drawn out and each day brings a new take on the situation. If the war becomes a drawn out conflict, with house to house street fighting, the global markets would not respond favourably. A longer war would probably lead to higher oil prices as well as a further weakening of the US dollar with bad knock-on effects for the US and global markets.”