Barclays Wealth set to reinvest cash

Barclays Wealth may boost its bullish stance on developed-market stocks by reducing its cash investments as economic growth strengthens, according to its chief investment strategist. The money manager for private individuals is looking to reinvest the “overweight” cash position that it built in the second quarter, Kevin Gardiner, the global head of investment strategy, said last week. Barclays Wealth has an overweight stance on developed-market equities, which he said represent the cheapest asset class available to investors. Global economic growth will accelerate during the second half as consumer spending increases and the labor market recovers, Mr. Gardiner said. The MSCI World Index has climbed about 5.3% this year, surging last week as concern that Greece would default on its debt eased. “Things will settle down, and then it would be appropriate to add more risk to portfolios,” Mr. Gardiner said. “The risk of being out of the market is higher than sticking with it.” Barclays Wealth manages about $266 billion for clients. Barclays Wealth maintains an overweight position in U.S. energy shares and an underweight stance in consumer staples and utilities. Stocks rallied around the world two weeks ago after 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 S&P 500 is up more than 6% this year.

"GOOD REASONS'

“The norm for the global economy is that growth continues,” Mr. Gardiner said. “You need to have good reasons that would warrant a setback in growth.” The MSCI World Index is trading at about 12.9 times the estimated earnings of its companies, according to data compiled by Bloomberg. Barclays Wealth added to its cash position in the second quarter by reducing its investments in high-yield corporate bonds and debt that is graded below Baa3 by Moody's Investors Service Inc. or BBB- by Standard & Poor's Financial Services LLC.