Henderson fund manager Chris Burvill is expecting to raise the equity exposure in his £1.1bn Cautious Managed portfolio in anticipation of a rally in markets.
Burvill says he could take his equity exposure from its current position of 54 per cent to its 60 per cent limit.
He says: “It is quite conceivable that we could see a 10 per cent rise in the market between now and the end of 2012, particularly as much of the bad news is already priced in.
“This would give an opportunity to raise exposure to the limit of 60 per cent and then potentially take profits and re-cycle some of them into the bond market.”
Burvill has boosted the number of stocks in the £1.1bn fund from 132 to 200 following the merger of the managed distribution fund into the portfolio. The merger sees a raft of bond holdings added, with additions in the gilts and high yield space.
Burvill says: “I could have had the same number of holdings following the merger but I would have been forced to sell in a fairly illiquid market. The additions have skewed the portfolio to a more bullish stance than it has seen in a while.”
Hargreaves Lansdown head of research Mark Dampier says: “A lot of concern is priced into markets but raising equity exposure would still be a brave move.”