For investors in a position to take risk, bargains can be found in the riskier asset classes which remain cheaply priced on a long term view, according to Jeremy Beckwith, Kleinwort Benson’s chief investment officer.

Mr Beckwith believes equities and corporate credit are attractively valued as yields on these assets are high and the markets are already discounting a very serious recession.

Anticipating that emerging markets economies will recover more rapidly than Western economies, stimulating demand for commodities, Mr Beckwith expects that the commodities asset class will become attractive later in the year.

Structured products that take advantage of current levels of implied volatility to offer a high income while limiting downside risk will become increasingly popular, predicts Mr Beckwith, particularly for those investors who are suffering as a result of falling interest rates.

Finally, Mr Beckwith maintains that 2009 will present opportunities for hedge fund investors due to the current dislocation and lack of liquidity in many financial markets.  However, there is a risk that the industry will see a deluge of redemptions following the allegations surrounding Wall Street financier Bernard Madoff, he said.

Kleinwort Benson provides services to private and corporate clients through its private wealth management, and corporate fiduciary and intermediaries business lines. 

The firm operates from offices in Birmingham, Cambridge, Edinburgh, Guernsey, Jersey, Leeds, London, Manchester and Newbury. 

Kleinwort Benson is a subsidiary of Dresdner Bank and a member of the Allianz Group.  Recently Allianz agreed to sell Dresdner Bank to Commerzbank to create Germany’s second largest banking services group.