Jupiter’s Guy de Blonay, who took over the company’s £978m Financial Opportunities fund from Philip Gibbs this month, says emerging market equities will suffer amid a new wave of tightening measures.
He says the markets will continue to grow in the longer term but for now developed markets such as America are a better bet for investors.
He says: “This is very much on the basis that the West has been struggling to kickstart lending but in emerging markets that struggle is ending and the struggle to contain growth is starting.
“We will see some tightening policies intensifying, in China, for example, but in the West we are more confident that the economic recovery is gaining speed and remains in a relatively low-inflationary environment.”
De Blonay says American companies are likely to deliver “pretty healthy returns” and continue to reward investors with attractive dividends.
The fund’s significant overweighting towards Asian emerging equities has changed to a 20-30% weighting in American financials. (article continues below)
De Blonay says: “We are still relatively cautious about Europe, as government risk is still an issue that has to be addressed.”
He downplayed fears that the fund, which he has co-managed with Philip Gibbs since June last year, could suffer after Gibbs was removed as a named manager on the fund.
He says: “The franchise will still operate the same way. Philip will spend time on macro through the absolute return fund and I will spend more time on bottom-up stockpicking ideas but we are a team.”
Ben Seager-Scott, a senior analyst at Whitechurch Securities, says: “Short-term prospects for the US are particularly positive and we expect the environment to remain supportive of corporate earnings at least until the elections next year.”