After calling an entry to the wealth management stocks 12 months ago David Allingham, Analyst at Eley Griffiths Group, has now reduced exposure to the space

After calling an entry to the wealth management stocks 12 months ago David Allingham, Analyst at Eley Griffiths Group, has now reduced exposure to the space. We have reduced our exposure to wealth managers given the significant profit growth and valuation expansion over the last 2 years. We read the high beta correction in early 2014 by the NASDAQ, Biotechs and Russell 2000 as a good lead indicator of more subdued market returns in 2014. At the time stocks such as PTM and HGG needed continued equity market momentum to justify their valuations. Whilst we remain net positive equities, the SP500 is unlikely to deliver another +30% return this year and therefore these stocks are unlikely exceed their recent highs in the short term.