Geffen - Why I am cutting my 20% cash level

Neptune CEO Robin Geffen is predicting a return to a bull market when foreign investors snap up 'steady eddie' stocks languishing at the bottom of the FTSE 100.

Although the fund manager did not give any particular timescale, he told investors at a conference this morning he has started to reduce the extremely high levels of cash on a number of funds.

His £887m Balanced fund had more than 20% in cash at the end of October but Geffen said he has started to "trickle" this back into the market over the past few days.

"We will know we are back in a bull market when we start to see steady eddies such as BAA, which often lurk at the bottom of the FTSE, being bought by foreign investors when sterling looks cheap," he said.

"I have started to put cash to work and will continue to do so."

Although his Balanced fund is positioned "relatively defensive in the short term" he is more positive on a medium- to long-term view as he expects emerging markets will support global growth.

He believes EMs will contribute two-thirds of total global growth over the next five years and Neptune as a house forecasts GDP growth of 8.5% in China in 2012 and 7.2% in India.

However, the group predicts negative growth in Europe, with the economy set to shrink by 0.2% while the UK will grow 0.8% and the US 2%.