FUND managers should diversify their portfolios in anticipation of a potential slowdown of the global economy. Jim Leaviss, manager of the M&G Gilt & Fixed Interest Fund, made the prediction at the recent launch of the Fortis Portfolio of Funds Management Service.

‘Consumers in the USA and in Britain have been stretched over the past few years and have taken on too much secured debt such as mortgages and unsecured debt such as credit cards,’ he said.

‘Interest rates have gone up and people are starting to feel the effects,’ he said.

‘While newspapers focus on the short-term inflation pressures and how the Bank of England may be hiking interest rates shortly, I believe that in the long term they will have to cut interest rates to help bale out the consumer, who is showing signs of distress as a result of all this debt.

‘We are seeing a similar situation in the USA, where they also have high debt levels.’

While he said it was not a time to panic, investors should ensure that their portfolios were diversified across a range of asset classes and not skewed towards one particular section of the market.

‘It is by diversification that you de-risk your portfolio. But be prepared to take a long-term view on investment and not expect returns overnight.’

Also speaking at the event at the Old Government House Hotel was Ian McVeigh, director of asset management firm Jupiter Unit Trust.

He spoke with optimism about the island’s sustainable economic future.

He claimed there would be growing demand from investors for the sophistication and quality of service that centres like Guernsey could offer.

‘There are hugely positive initiatives happening in the world, especially in emerging economies, which are likely to be extremely important for key jurisdictions,’ he said.

‘I believe that there may be a very substantial and sustained savings boom over a long period of time and this could be very good news for the island’s economy.’

Jason Robilliard, Fortis’ investment manager, said both guest speakers were of great interest.

‘It has been great to have two fund managers of this stature appearing on stage with two very different views on the investment world,’ he said.

‘It reinforces our belief that diversification and the willingness to take a long-term view is key to successful investing.

‘This rationale is the foundation of our new fund-based service which we believe is an ideal investment strategy for people to consider. It will involve best in class managers to diversify and reduce risk at a very competitive price.’