Fidelity International’s Trevor Greetham said he’s been selling stocks over the past six months in anticipation of economic “difficulties” later this year.
Better buying opportunities will emerge in the second half of this year ahead of a rally in 2011, said Greetham, London- based director of asset allocation at Fidelity International, which has $215.9 billion under management. Even though leading economic indicators are weakening, the current situation shows “no more than a moderation in recovery,” he said.
The MSCI World Index has dropped 8.4 percent this year, following a 27 percent climb in 2009, on mounting concern that Europe’s worsening sovereign debt crisis will hurt the economy. Data last week showed new-home sales in the U.S. sank to a record low, while the Federal Reserve signaled that European indebtedness may lead to a weaker U.S. economy.
“We’re ‘neutral’ equities, and we may sell more if there’s sharp rally in the near term,” Greetham said from London in a live webcast to reporters in Hong Kong. “Buying opportunities will be marked out by when people are panicking. There’ll be a lot of talks about double dip.”
Greetham, who manages the Fidelity Funds-Multi Asset Navigator Fund, said he has started buying gold. His funds, which typically do one trade per month and sometimes less often, sold stocks twice in May, he said.
“We’re in a multi-year sustainable recovery, and we’re also in a bumpy year,” said Greetham. “By year end, we’ll have good buying opportunities from people who are letting go.”
Fidelity International is “overweight” the U.S., Asia, and emerging markets, as well as in the consumer, technology and healthcare industries, according to Greetham, who joined Fidelity in January 2006 from Merrill Lynch & Co.
China announcing new measures to bolster economic growth and holding off from raising interest rates will give investors another reason to buy, according to the fund manager.
The Chinese government has been taking steps to cool property prices in an economy that expanded 11.9 percent in the first quarter from a year earlier, the fastest pace in almost three years. Analysts are divided on whether China has done enough to slow credit growth, with eight of 14 in a Bloomberg News survey last week predicting the central bank will raise the benchmark one-year lending rate by the end of December.
“Any signs of changing in China’s policies toward stimulus will present great buying opportunities,” he said.