Schroders has slashed its exposure to industrials in the £58.2m Schroders global alpha plus fund due to concerns about the impact of slow growth in China and the eurozone crisis.
Head of global equities Virginie Maisonneuve cut the fund’s industrials exposure from 15.2 per cent in January to 6.1 per cent at the end of September. She says: “Due to the general slowdown and the volatility that I expect in the markets between now and March, there is a case to be a little more cautious.”
Maisonneuve adds that stability in Europe and growth in China would encourage her to add to industrials.
She says: “Electoral issues in Europe make it difficult for a huge rescue package and we will probably need additional measures in the first quarter of 2012 to help with the sovereign debt crisis.”
Maisonneuve says she is also looking at how the Chinese slowdown is going to be affected by Europe over the next couple of months, alongside the impact of monetary policy tightening.
Bestinvest senior analyst Ben Seager-Scott says: “Industrials have been doing very well but that was predicated on a demand from emerging markets. China is used as a proxy for emerging markets. We are hoping to see GDP growth stabilising out in China. If it does not, demand from China could drop off and that could have an impact on industrials.”