An investment fund says stock picking is being disregarded as markets and asset managers focus on the bigger economic picture.

John Bennett, manager of the Gartmore European Focus Fund and Gartmore European Selected Opportunities Fund said ‘markets, as well as money managers, remain at the mercy of the macro’.

“In a year dominated by phenomena such as ‘risk on, risk off’, high frequency trading and quantitative easing, stock picking seems relegated to the sidelines, to the extent that it sounds almost quaint.”

Bennett believes there has been a ‘headlong rush into private equity and other ‘alternatives’’ which was giving way to a greater scramble. This search for yield leaves investors potentially in the wrong asset classes, according to Bennett.

“Put simply, our sense is that time, as well as central banks and their governments, is on the side of equities and against bonds,” he added.

Invesco Perpetual fund manager Neil Woodford said earlier this month that the markets were largely ignoring the inherent value in individual equity investments. He said that ‘dependable stocks’ of major corporations listed in London ‘currently trade at unusually low valuations’.

Writing in the Financial Times, Woodford said: “The economic outlook is fraught with uncertainty, so to me it is inexplicable that the stock market is not embracing certainty or dependability where it can find it.

“Perhaps it is because investment horizons appear to be getting shorter and shorter, encouraging brief bursts of risk on/risk off activity that seem to characterise current markets, stimulated by the latest batch of economic data.”

© Fair Investment Company Ltd