Fund managers eye bargains as stocks stay low

CRASHING equity prices over the past two weeks have caused fund managers to re-enter the market as bargain hunters, it emerged yesterday.

Markets rallied after six sessions of selling amid signs investors were taking advantage of ultra-low prices.

Multi-asset fund managers at Fidelity, Schroders and BlackRock said a return to the markets made sense after the FTSE 100 dropped 20 per cent in two weeks.

“The recent market turbulence has left some assets looking quite cheap,” said Johanna Kyrklund, Schroders’ head of multi-asset investments. “In the short term, we think there are opportunities.”

BlackRock investment strategist James Holt said he was investing his profit from gold and bonds in equities.

“As the market goes lower, we will be nibbling into the market each day. Our bonds and gold holdings will be doing well, but when we are rebalancing, we will be rebalancing into equities,” he said.

Fidelity’s head of multi-asset funds Trevor Greetham said dividend yields “compared favourably with the income available on the government bonds to which nervous investors are flocking.”

But Paul Duncombe, Schroders’ head of multi-asset investment solutions, said gold “remains a valuable diversifier in our portfolios”.

“Equities have sold off heavily and look attractive on a valuation basis,” he said, “but we believe there are still too many risks out there to be making major shifts from safe haven assets to risky assets at this point in time.”