Anthony Bolton interview
- From: Daytona <junk721176@xxxxxxxxxxx>
- Date: Sat, 29 Sep 2007 06:13:17 -0700
Fidelity's Bolton eyes UK bear market
Thu Sep 27, 2007 7:05pm BST
By Laurence Fletcher
LONDON (Reuters) - The UK stock market may be in the first stages of a
bear market lasting six to nine months, Fidelity International star
fund manager Anthony Bolton said on Thursday.
"It's been my central case that after a four-year bull market we are
more likely to have a bear market than a correction and then the bull
market continues," Bolton told Reuters.
"It may be that we are in the first stages of that (a bear market). A
typical bear market lasts six to nine months."
Bolton, who runs the 3.1 billion-pound Fidelity UK Special Situations
Fund and the 410 million-pound Fidelity Special Values investment
trust, in 2003 correctly called the start of a bull market in UK
stocks that has lasted over four years.
His comments on Thursday come after a turbulent summer for equity and
credit markets, prompted by concerns that a surge in defaults in the
U.S. subprime sector -- which lends to risky borrowers -- could lead
to a wider financial crisis.
The FTSE 100 (.FTSE: Quote, Profile, Research) blue-chip index, which
in July traded above 6,700, fell below 5,900 in August although it has
since recovered strongly and on Thursday closed at 6,486.4.
"I think we are going to be in a more difficult environment for a
while. Investment markets have rallied strongly and in the short term
that can go on. But when the evidence of the effects come into the
real world (it will be difficult).
"The U.S. mortgage crisis is not one that will be solved overnight ...
When people buy a lot of assets they thought were riskless and then
lose a bundle, it's a behaviour-changing event that doesn't disappear
really quickly."
"MORE GROWTHY"
Bolton, who has built up exposure to sectors such as media and
technology in recent years, said he has also increased his weighting
in banks, an area where he said his exposure had previously been
"extremely low".
While he usually takes a value approach to investing, he said he is
currently taking more of a growth approach than normal.
"Value has done very well and my slight concern is that sectors such
as tobacco won't be as defensive as they have been in the past," he
said.
"At the margin I'm a bit more growthy than normal."
He also said emerging markets, many of which have ridden out recent
stock- and bond-market turmoil better than some developed markets, may
not be the safe haven that some fund managers have suggested, and said
he has reduced exposure to Chinese stocks.
"When we've hit more difficult conditions, historically emerging
markets have been affected more than developed markets.
"So far (during this summer's turbulence) that hasn't been the case.
People have said they've come of age. I'm not so sure ... I think
emerging markets are still higher risk."
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