04/01/2012
Swisscanto slightly overweight in equities
Swisscanto has gone into the year 2012 slightly overweight in its exposure to equities, due to their attractive valuation. “We are expecting a continuing recovery in equities. Ongoing aversion to risk on the part of investors, and our valuation models are sending signals to buy. Although profit outlooks for 2012 have been revised downward once again for European businesses due to the recession threatening Europe, their shares are valued at an extremely advantageous level», the Swiss group says in a statement released on 3 January. Regionally, Swisscanto is taking into account the very significant undervaluation of European equities, and has slightly overweighted them by 1.5 points, to the detriment of Japan (-1%). “Stocks have now reached as large an undervaluation as the one which followed the bursting of the tech bubble in 2000,” says Swisscanto. In terms of sectoral allocation, the group has increased its exposure to banking sector shares (+1%) to the detriment of commodities (-1%). In currencies, “the Swiss franc remains considerably overvalued against all other currencies. We are maintaining our overweight position on the Norwegian kroner against the Swiss franc.” The Norwegian kroner is currently benefiting from rising oil prices, while the Norwegian economy and public finances are in solid condition. Swisscanto is also building a long position on the Swedish kroner to the detriment of the Japanese yen, as the Swedish kroner is more heavily undervalued than the Canadian dollar, and is currently generating the fourth-highest additional returns of all major currencies.
