Coutts is to focus on diversifying its investment portfolio by increasing its exposure to equities over the coming year.
The UK bank said opportunities include: an energy renaissance, Japanese equities and the pharmaceutical sector. The end of the bond bull market and the risk of inflation being re-ignited constituted the main investment risks.
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The financial market will remain challenging for 2013 but Coutts’ investment strategy committee intend to make a move toward the equity market.
"It is prudent, as investors, to look profoundly at all the risks and to try and medicate them. We buy bonds that will allow us to diversify properly and lower those risks," said Paul Sarosy, Coutts’ head of investment solutions, at a media briefing.
European equities carry inherent risks but Coutts’ CIOs are confident that some government and corporate bonds on the European market remain good investments. "You can still invest in Europe if you invest selectively," Sarosy says.
UK chief investment officer at Coutts, Alan Higgins, is expecting China economy to pick up again this year as well as selected Japanese equities.
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By GlobalDataHowever, Coutts 2013 investment strategy excludes technologies as it is very much stock specific and raises concern over a 1-2% risk of inflation which could be responsible for substantial losses.
