Speaking at the Cazenove Capital Multi-Manager Live event in London last week, Taylor said the biggest opportunity at present is in China, which he said was the one nation that could stimulate strong organic growth internally without any unorthodox measures.
“China does not have to do things like monetarisation, instead it can use more conventional methods like issuing bonds to its banks and generating growth through infrastructure spending, an area of the market it is very short on at the moment.”
Taylor, who has recently increased the portfolio’s net exposure on the long side, said he is also a fan of Russia, where he feels oil companies are att- ractively priced.
“They look fundamentally cheap and we have seen a 30 per cent devaluation in the rouble since last August. I am also a fan of telecommunications companies selectively around the world, particularly on the back of the rally.
“There are a number of telcos that I could buy that carry seven times earnings and also offer 7 to 15 per cent dividend yields, which grow both their capital and their earnings and I think that when the hot air blows out of the commodities space from the last few weeks, people will return to good old fashioned companies that are cheap and pay good dividends.”
Taylor said he is still against investing in Europe as a whole, pointing to the fixed exchange rate, a central bank that is behind the curve and the lack of unity between governments.
He said: “Europe needs a raging currency which it hasn’t got and a decent deregulation of its labour markets and it is never going to get that. Ireland is almost the canary in the mineshaft where it is now talking about a deficit of 13.5 per cent GDP.”