Investment Strategies

EXCLUSIVE: ABN AMRO Private Banking Remains Overweight Stocks, Smiles On Energy

Tom Burroughes Group Editor London 19 September 2014

EXCLUSIVE: ABN AMRO Private Banking Remains Overweight Stocks, Smiles On Energy

ABN AMRO Private Banking is sticking to its overweight equity stance in its fourth-quarter investment outlook and favours holding firms that poised to benefit from the current abundance of oil and new energy sources, this publication can exclusively report.

ABN AMRO Private Banking is sticking to its overweight equity stance in its fourth-quarter investment outlook and favours holding firms that are poised to benefit from the current abundance of oil and new energy sources, this publication can exclusively report.

The private bank, which oversees over €176.4 billion (around $290 billion) of assets, believes fears of a new downturn in Europe are inconsistent with growing optimism about the outlook for the US economy, and remains overweight in European equities as well as in emerging market stocks. However, US equities are kept underweight on valuation grounds and with the prospect of interest rate increases and the prospect of a strong dollar, it said in a note.

Investment in selected global industries is seen as a means to bridge divergent medium term GDP growth expectations between regional economic blocks. The IT, healthcare and materials sectors remain favoured sectors and with overweight ratings.

Asset allocations in the private bank’s balanced model portfolio remain unchanged from the previous quarter, with equities comprising 43 per cent, bonds 37 per cent, property 8 per cent, cash 5 per cent, hedge funds 5 per cent and commodities 2 per cent.

“We are keeping our sails out and remain ‘risk-on’ in our approach, as stock market fundamentals continue to counterbalance perceived macro risks. Our investment philosophy is also driven by a view that global industries matter more than geography – there is often a disconnect between the macro picture and strong micro stories of individual companies operating in multiple regions,” Didier Duret, chief investment officer at ABN AMRO Private Banking, said.

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