Samouilhan, a multi-asset fund manager at Aviva Investors and co-manager of the £1.8bn Target Income Fund, said the pressures coming into the credit market had prompted him to shift away from the asset class.
Instead, he has pushed up the fund’s exposure to equities, which currently stands at 30%.
The victim of this shift has been the fund’s exposure to credit which has almost halved within one year and is down to just 10%.
The manager is putting his reallocation down to reflation expectations – a key theme for 2017.
Samouilhan said: “In that investment view we could see plenty of times when credit could come under some pressure and we want to avoid some of that.”
He added: “Equities are quite expensive, but you can’t make the argument they are too expensive.
“Which of these do I think is the best place to have my money? It’s equities not fixed income.”
Samouilhan also sees no reason for markets to begin their fall from record highs and said: “We need to go to record highs to get to other highs, what we need to do is look at valuations beneath that.”
While he does believe there is a “sugar rush of growth coming through” that will open up opportunity for equity investors, he urged caution.
Warning the market would not move in a straight line and would move sideways before moving up, as it did in the early days of this year, Samouilhan said investors need to be prepared for some disappointments along the way.
