(MENAFN Press) Barclays published its monthly Wealth and Investment Management flagship research report titled "Compass", which focuses on providing investment advice and recommendations to investors across the globe. The February 2014 Compass report encourages investors to maintain their investment discipline and, if the investment personality permits, continue to switch from bonds to equity to build up their strategic mix.
The report highlights that the business cycle and relative valuations continue to favour stocks over most other asset classes in 2014. As a result, Barclays' tactical allocation committee moved positions of developed market equities from neutral weight to modest overweight as they believe that over the course of the year, this asset class is expected to offer attractive return potential at current price levels.
Barclays maintains that the robust returns registered in 2013 need not translate into a poor 2014. The beginning of the year saw the global economy gaining momentum and becoming more synchronised. As a result, Barclays' strategists believe that global capital markets are likely to move from the stage whereby they are driven by expectation to the stage when performance will rise in tandem with the improving economic environment. Thus, Barclays' strategists are constructive on risk assets on a strategic basis, particularly equity, as economic activity in the major global economies “ the US, Europe, UK and Japan “ continues to surprise on the upside.
Benjamin Yeo, Chief Investment Officer, Asia and the Middle East for the Wealth and Investment Management division at Barclays, said: "The long-overdue setback in developed stocks may have started in January. However, looking forward, Barclays' Asset Allocation Committee believes that developed market equities are the most attractive risk asset class, with solid economic prospects and a more attractive price point today given the recent pullback."
He added: "We do not intend to chase the rally in Government bonds as we remain tactically neutral on this asset class. We will also stay underweight on commodities, investment grade credit and high yielding fixed income."