Top five assets to hold in your portfolio

December 2, 2009 12:57 pm by Lucy Warwick-Ching

If like me you’re already bored of planning for Christmas then it could be time to spend a few hours organising your portfolio instead.

I had a chat with Adrian Lowcock, senior investment adviser, this morning about the top five assets your should have exposure to in your portfolio at the moment. Some, such as the inclusion of commercial property in your portfolio are more controversial than others. But it all makes for interesting reading.

Here are his thoughts:

Commercial property
After two years of falling capital values, commercial property prices have started to stablise and with yields of over 6 per cent available on prime property total returns are now improving. Commercial Property is an income asset and whilst we are some way off upward only rent reviews the yield looks attractive in the current climate.

Asia Pacific
In comparison, the superior demographics and a lower cost base lead us to believe Asia and the Emerging markets remain attractive over the long term. Whilst the long term story remains intact, current market levels look fully valued, buy on weakness.

UK Equity Income
The rally in equities has left behind defensive stocks, with the gap between growth and value being much wider than average we expect to see this come in. Traditional equity income funds look good value relative to their growth peers. And you get a yield whilst you wait for the market to readjust.

Corporate Bonds
The easy money in Corporate Bonds has gone, however the same can be said about most other asset classes. There are still opportunities and the yields remain attractive. We have a preference strategic bond funds which are more flexible and are able to move across the risk spectrum.

Absolute Return funds
With expectations of low to anemic growth in the UK economy, the markets are likely to move within a tighter range from here. Absolute Return funds can provide some downside protection against long anticipated corrections but also perform in flat market conditions.

To read more on investment strategies go to our investment page on ft.com. And let us know what you’re investing in at the moment by posting your comments below.

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