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People are ‘crying wolf’ over market correction

Investec’s Max King is confident equities will continue to rally.

Investec fund manager Max King is ignoring those who “cry wolf” over an imminent market correction.

King, who co-manages the £65m Investec Managed Growth fund and the £376m Investec Multi Asset Protector fund, is concerned about negative sentiment upsetting his asset allocation.

But he says: “People have enjoyed shouting wolf as long as possible. One day the wolf will arrive and they will be right but I cannot see it getting here this year or next year.”

Within the portfolio, King has taken upside from the equity rally and says: “We have not been making many changes. Anyone who found this year difficult will struggle more in the future.

“It was not hard to come to the realisation that equities would be a good call and fixed income would become expensive.”

King has altered his currency exposure away from the pound on the basis that sterling is getting expensive, choosing instead to go for dollar exposure.  

He adds: “It is sensible to be cautious on the pound these days. We have converted forward contracts to hedge exposure.”

Keyte director Robin Keyte is more sceptical about how long the equity bull run will last.

He says: “I know the market has done well but it is difficult to say whether or not we will see the same returns next year.

“I am mindful of the fact we have seen almost two years of returns in the space of just a few months. It is unrealistic to expect this to continue so it is all about managing clients’ expectations.”

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