The Santander multi-manager team has moved from an underweight to a neutral position on equities as it has seen signs of improvement in Europe.
Head of fund management, global multi-manager Tom Caddick and senior fund manager Toby Vaughan have been underweight equities for the past year in the £6.6bn range. They have moved to a neutral position by adding to both UK and European equities.
Vaughan says the underweight position to equities was due to structural deleveraging in the West, a low-growth environment and severe market reactions when there is disappointing economic data.
He says: “There has been a change in terms of policy intervention in Europe, which is a move in the right direction. There has also been a more stimulative policy movement in global regions, such as the UK, US and China.”
China cut its interest rates this month in a move that showed concern over slowing growth and the Bank of England said it would inject another £50bn of stimulus into the UK economy.
Vaughan says to go overweight in equities he would need to see more material progress in Europe and expansion of the Federal Reserve’s balance sheets.
Skandia head of multi-manager Ryan Hughes says he believes that opportunities can be found in Europe.
He says: “At a headline level, there is some poor news coming out of Europe, as there is across the rest of the world. But at a corporate level, the reporting is not reflecting this scenario. If you are able to take a sensible time horizon of 18 months to two years, European equities relative to US equities look good value.”