Taking a contrarian bet at a time of continued gloom about the global economy and fears about eurozone debt, ABN AMRO, the Netherlands-based bank, has moved to take an overweight stance on equities and has cut its cash reserves.

The bank said there are other “safe haven” assets besides gold, which is trading around the $1,800 per ounce mark, albeit off record highs. The bank advocates that investors hold cash-generative firms and property, according to a regular briefing note on its investment opinions.

The banking group argues that although the macro-economic environment is weak, the risks of a return to recession are “exaggerated”. ABN AMRO said its balanced model portfolio is currently 19 per cent cash, 28 per cent bonds, 43 per cent equities and 10 per cent alternatives.

Real estate returns to favour, due to upward pressure on rents from limited supply and predictable cash flows. Hedge funds have been downgraded to neutral.

“We recognise the challenges posed by the eurozone debt crisis, but have a route for investors to put capital to work whilst minimizing the risk of emotional decisions. Income-generating equities, real estate, corporate bonds and non-traditional currencies have solid fundamentals. We have also reappraised emerging markets as a growth sanctuary,” said Didier Duret, chief investment officer of ABN AMRO Private Banking, part of ABN AMRO.

The private banking arm of the Dutch bank oversees around €164 billion (around $225 billion) of client assets.