Time to get back into stocks, Vontobel exec says

By Maria Pia Quaglia

MILAN (Reuters) - Switzerland's Vontobel (VONN.S) is starting to get back into equities despite a looming recession because of attractive multiples and an easing of forced selling by investment funds, a Vontobel director told Reuters.

Investors have fled global equity markets as the worst financial crisis since the Great Depression threatened the survival of many large banks and central banks have rushed to cut interest rates in a bid to prop a faltering economy.

Yet Vontobel, to date heavily underweight equities, is starting to look at investments on European stock markets although still steering away from banks despite their cheap valuations.

"Over the next six months, as the deleveraging process eases, stock markets can in part recoup (losses) or at least move sideways," the investment director of Vontobel Europe's Milan branch Massimo Jakelich told Reuters in an interview.

Jakelich said that over the next few years equity investments could turn out to be rewarding, but it was too early to make bets on any financial stocks.

"There are still too many uncertainties, firstly on the balance sheet but also on margins, which will be lower," Jakelich said.

The Swiss wealth and asset manager was also looking at investing in U.S. stocks, though it said hedging was necessary to cover currency risk.

Longer term, opening positions in emerging countries could be interesting, Jakelich said.

Vontobel's fixed-income portfolio was focused exclusively on state treasury bonds, Jakelich said, to the total exclusion of corporate bonds despite their attractive spreads.

"This is because this crisis is not stemming from wrong company valuations, as it was the case in the year 2000, but comes streight from the world of (corporate) debt," he said.

(Reporting by Maria Pia Quaglia, writing by Stephen Jewkes; Editing by David Cowell)