And one of the areas on which he is positive is bonds, as he feels that current yields are sufficiently high to allow investors to just collect the income. And if economic conditions deteriorate, the likelihood is that investors would choose to buy bonds for safety, which would mean profits from a rise in prices.
He said the biggest change in markets over the past year was that "where at one time markets seemed to reward investors for owning illiquid assets, whether that be unquoted equities or bonds, now liquidity is very much prioritised.
"It was also a world where volatility of an asset didn’t really matter as everything was low volatility, and that has changed. I also think we are approaching a period where the gap in economic performance between the US and Europe will narrow."
In terms of what that means for asset allocation, he said: "The likelihood is that the traditionally inverse correlation between bond and equity performance has been restored, which is extremely positive for bonds.
"Our view is that a pivot in central bank policy in the US is coming so we are long duration there, but in Europe are a bit shorter in our duration."
David.Thorpe@ft.com
