Investors should be looking to UK large cap stocks and Asia for a safe haven in today’s tumultuous market conditions, argues Martin Gray, manager of the CF Miton Special Situations and Strategic Portfolios.

Currently concerns abound over when the next market gyration is coming from, amid weak economic growth in the US and widespread worries over sovereign debt. Added to this is the fact that the markets priced in a lot more upside than has actually come to fruition. Uncertainty over how problems like the eurozone debt crisis will pan out is adding to market jitters.

Against this backdrop, Gray advocates investors consider buying into large cap UK sustainable yield equities and avoid sectors like financials, commodities and resources. Asia is also favoured by Gray, who says that his Special Situations and Strategic funds have had a 15 and 20 per cent weighting to Asia respectively over the past six to twelve months - to their benefit. However, the funds’ Asian assets are predominantly sovereign bonds or AAA investment grade debt and local currencies.

Gray says going forward he will move into risk assets, principally equities at first, but also Asian property should markets return sufficiently. 

“Although these are the principal areas which we will be focusing upon, we may perhaps take a few profits on gilts which have performed very strongly especially considering how unlikely it is for these to return such massive gains,” he says.