Barclays Wealth set to jet from cash, move clients back to 'cheap' equities

Barclays Wealth set to jet from cash, move clients back to 'cheap' equities
Barclays Wealth may boost its bullish stance on developed-market stocks by reducing its cash investments as economic growth strengthens in the remainder of this year, according to its chief investment strategist.
JUL 14, 2011
Barclays Wealth may boost its bullish stance on developed-market stocks by reducing its cash investments as economic growth strengthens in the remainder of this year, according to its chief investment strategist. The London-based money manager for private individuals is looking to reinvest the “overweight” cash position that it grew in the second quarter, Kevin Gardiner, the global head of investment strategy, said in an interview today. Barclays Wealth currently has an “overweight” stance on developed-market equities, which Gardiner said is the cheapest asset class available to investors. Global economic growth will accelerate during the final six months of 2011 as consumer spending increases and the labor market recovers, Gardiner said. The MSCI World Index has climbed 5.3 percent this year, surging in the last six days as concern eased that Greece would default on its debt. “Things will settle down and then it would be appropriate to add more risk to portfolios,” Gardiner said. “The risk of being out of the market is higher than sticking with it.” Barclays Wealth manages about $266 billion for clients. U.S. stocks are the most favorable for Barclays Wealth, where it maintains “overweight” positions in energy shares and an “underweight” stance in consumer staples and utilities. The American markets reopen today following a holiday. Last week, stocks rallied around the world as Greek lawmakers approved a package of austerity measures needed to avoid default and companies from Nike Inc. to Monsanto Co. forecast earnings that exceeded analysts' estimates. The Standard & Poor's 500 Index has rallied 6.5 percent this year. ‘Cheap' Stocks “Stocks are cheap,” Gardiner said. “The norm for the global economy is that growth continues. You need to have good reasons that would warrant a setback in growth.” The MSCI World is trading at 12.9 times the estimated earnings of its companies, according to data compiled by Bloomberg. This is below the average multiple of 14.3 during the past five years, the data show. The wealth manager added to its cash position in the previous three months by reducing its investments in high-yield corporate bonds, debt that is graded below Baa3 by Moody's Investors Service and BBB- by S&P. --Bloomberg

Latest News

Advisor moves: FiNet practice Merrit Point tucks in $1B Truist team in Florida debut
Advisor moves: FiNet practice Merrit Point tucks in $1B Truist team in Florida debut

Elsewhere, a Commonwealth team in Massachusetts converts to Cetera, while Janney draws four former Wells Fargo advisors to its Radnor, Pennsylvania office.

Trader used firm ties to freeze $3.6 million, investors allege
Trader used firm ties to freeze $3.6 million, investors allege

Clients say he copied the boss on his emails - and now they can't touch their cash.

CFTC alleges North Carolina fund manager faked profits, lost $8.6 million
CFTC alleges North Carolina fund manager faked profits, lost $8.6 million

He wired millions to his own accounts and told investors the fund was winning.

OnePoint BFG taps RISR as advisors chase business-owner clients
OnePoint BFG taps RISR as advisors chase business-owner clients

The partnership arrives as most small business owners near retirement age still don't have a formal succession plan in place.

Trust & Will cuts staff amid restructuring, AI disruption
Trust & Will cuts staff amid restructuring, AI disruption

A spokesperson for the estate planning fintech cited AI's reshaping of the industry as Trust & Will restructures its business.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.