Justin Onuekwusi, part of LGIM's multi-asset team, which manages the Multi-Index and Mixed Investment funds, has become more bullish on risk assets despite many multi-managers across the industry slashing risk within their ranges.
Earlier this month, Harrington Cooper's Proprietary Asset Allocation Tracker revealed some managers had cut their equity and fixed income exposure in their balanced risk and income-focused multi-manager funds during a particularly volatile Q4 2018.
However, Onuekwusi said that he and the team have started to increase risk "right across the board after becoming more optimistic".
"Throughout Q4 we were neutral on riskand equities, but more recently we have decided to move the dial up in terms of risk assets," he said.
"We won't do this in a blasé way or put our foot down on the accelerator, but we will be more positive when the market falls and we will buy on those dips. The idea is to be a lot more risk-on than we currently are during the next few months."
The manager said the positive stance is a result of the team's belief the chances of the global economy overheating have been pushed out, as inflation expectations have fallen and the US Federal Reserve has hit the brakes on interest rate hikes.
"The risk of a recession in 2020, even into 2021/22, has dissipated and the cycle, for us, has now extended, which is a positive for risk assets and equities," he added.
"The credit dynamics of the world have also become a lot better and we are not seeing that huge expansion of credit growth you tend to see towards the end of a cycle."
Onuekwusi said it is also becoming harder to see a significant credit event in China, which has contributed to his more positive outlook as such an event would in turn have a dramatic effect on the rest of the world.
However, he remains concerned about China and the US being "at loggerheads" on trade as well as the potential for political risk across various regions.
"We know there is rising populism and income inequality so have to keep in mind how that develops," Onuekwusi added.
Central bank risk also remains on the manager's radar, which he said means he will ensure his fixed income exposure is as diversified as possible, despite being a relatively low proportion of portfolios.
He said: "Overall, we have a slight negative tilt on duration but we do believe fixed income still has a big role to play in multi-asset portfolios.
"Following every growth scare we have seen since the Global Financial Crisis, the asset class has provided protection relative to equities so we appreciate what it can do.
"But it is important to spread that exposure across different regions so you are not in the hands of just one central bank."
Partner Insight: In this environment, a well-resourced credit research team is essential and having traders to keep check on markets is very helpful too, according to Fidelity fixed income managers Sajiv Vaid, Peter Khan and Kris Atkinson
Impact of political turmoil and Brexit
Latest Incisive Works research
In recent weeks, investors have fixated on the inversion of several sovereign yield curves, most notably the US Treasury curve.
How are VCTs and EIS products doing?