ABN Amro Private Banking says it has significantly increased the cash component of its assets under management as it anticipates the tapering of asset purchasing programmes by central banks.
Since the last quarter, the company has raised the cash level in its balanced model portfolio from nothing to 13%. It trimmed the equity exposure from 44% to 40%, reduced bond exposure from 44% to 37% and property from 5% to 3%.
Allocations to hedge funds and commodities remained the same at 5% and 2%, respectively.
“Our move into cash is a temporary adjustment in response to the likely end of open-ended quantitative easing, which is driving current volatility and sector rotation,” says Didier Duret, chief investment officer at ABN AMRO Private Banking.
“We believe it is time for investors to look beyond traditional sources of yield, which are fully valued, and to consider opportunities in companies exposed to above average economic growth in the US and Asia.”
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