ABN AMRO recently released its second quarter investment outlook, which found the bank maintained its overweight position on European equities and underweight position for U.S. equities from the previous quarter.
The bank advised careful stock selection and risk mitigation via hedge funds in 2014's second quarter. ABN AMRO said it sees support for valuations from both Europe and the U.S. from a continued economic recovery with global growth at 3.7 percent.
The outlook found that investors are moving away from emerging markets even though such fears are considered overdone. ABN AMRO predicted a 4.8 percent growth in higher emerging markets for 2014.
ABN AMRO changed its rating of the materials and healthcare sectors to overweight. The defensive telecoms and consumer staples sectors were moved to underweight.
"Now is the time to zero in on companies with the capacity to deliver earnings and to select bonds that can cushion interest rate risk," Didier Duret, the chief investment officer of ABN AMRO private banking, said. "We also recommend hedge funds with strategies that can benefit from volatility and divergence among markets, countries and companies."
The private bank also altered the allocations in its balanced model portfolio.
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