PSigma Investment Management, the UK wealth manager, has told its clients that cash weightings are “high” while its overall stance on risk assets is neutral against a background of potential long-run equity growth but also concerns about the eurozone.

“We believe that our portfolios are adequately balanced to reflect the short-term uncertainty and will be able to take advantage of attractive longer-term opportunities,” Thomas Becket, chief investment officer, said in a note.

“We acknowledge that there is still further downside potential for equity markets in the coming months. However, we are genuinely enthusiastic about the potential returns from our portfolios over the next couple of years and have been conscious that a significant correction was possible as 2012 progressed,” he said.

If European policymakers come up with a credible response to today’s concerns about debt in eurozone member states such as Spain, Italy or even Greece, then markets could benefit, he said.

“I see no reason at this juncture to change our view that equity markets will finish the year higher and we can make positive returns in 2012,” Becket said.

“An improvement in markets will come from an improvement in economic leading indicators, temporary resolution in Europe, hints of further Quantitative Easing from chairman Bernanke and the US Federal Reserve, further support from the European Central Bank and confirmation of decent corporate profitability through the summer,” he said, adding that investor sentiment is now “incredibly poor”, so any change in fortunes could produce a short-term market bounce.