Steer advises caution on highly leveraged stocks

Group's UK Alpha manager advises against early forays into leveraged stocks post crunch, focusing on companies with overseas earnings

Renowned UK equity manager Tim Steer has advised against early plays on highly leveraged stocks after the credit crunch. The manager of the £600m New Star UK Alpha fund said investors who are currently backing banks must be oblivious to market conditions. "Many of the banks' CEOs do not even know what is going on," he said. He adopted aggressive underweights to financials, consumer sectors and housebuilders in advance of the problems in those sectors. "A credit crunch situation is basically like a waterfall," he said. "If the banks are not lending money it means the consumer will ...