Axa's Marwood drops traditional gilts in favour of financial stocks

Axa Ethical Distribution fund manager Richard Marwood has added to financial stocks this month and offloaded almost all traditional gilts on concerns of inflation.

Marwood’s £55m fund has bought shares in Man Group, Icap and Aviva over the past month, believing stocks with a reasonably high market exposure should perform well in this environment. Last week, the Bank of England revealed inflation could hit 3.5% early this year, before falling to less than 2%. “If the UK has a real debt problem, it would coincide with a lot of pressure on sterling, which would be inherently inflationary,” Marwood says. “You have to be mindful of inflation, and it is something investors have to protect against. In inflationary conditions, we would expect shares ...