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Standard Life Investments reduces US overweight over fiscal cliff fears

Standard Life Investments has reduced its overweight to the US in the £2bn MyFolio range due to concerns about the US fiscal cliff.

Many investment experts are predicting a large reduction in the US’s budget deficit and a corresponding economic slowdown.

SLI has reduced the overweight in each of the 15 MyFolio funds by 3 per cent over the last few weeks.

Standard Life head of fund of funds management Bambos Hambi says: “We recently took money out of US equities, as I am concerned about the impact of the fiscal cliff. While the impact on the economy may not be as bad as people think, it will create uncertainties. It may last beyond 2013 and so we have taken some profit from a strong performing market.”

The exposure was added to European equities, as valuations look attractive and there is a larger potential for European equities to be re-rated, he says.

Hambi says: “We see value will be released in European equities by the European Central Bank’s commitment to unlimited bond buying.”

Whitechurch Securities managing director Gavin Haynes says: “The US has performed well relative to overseas markets and if the global economic climate was to improve, we would expect markets like European and Asian equities to provider greater returns.”

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