Top managers call bull market

High-profile managers are convinced the recent equity upturn indicates global markets are entering the next bull phase, dismissing fears the 2009 spike is simply a bear rally.

Schroder's Richard Buxton and Fidelity's Sanjeev Shah have both called the bottom of the market, believing the worst of the downturn to have passed.

Buxton, head of UK equities at Schroders, says despite the FTSE All-Share surging around 30% from its March low, he believes valuations have only moved from "depressed to cheap".

"We passed an important point at the end of March and I do not think we will revisit those lows," he adds.

Echoing his predecessor Anthony Bolton, who recently called the start of the next bull market, Fidelity UK Special Situations manager Sanjeev Shah agrees the worst is over.

Shah points to historical data from US bear markets since 1900, which shows the recent sharp slide was the worst since the Great Depression.

"A fall of 57% means this was the second-worst bear market in history," he says.

"I think we have seen the worst in equity markets and probably the worst in house prices.

"I can see a bit more of a decline in GDP and unemployment, but how much has already been discounted in stock and house prices.

"There will be setbacks along the way, however. We are not off to the races - I do not think there will be a V-shaped recovery."

Similarly, Legg Mason guru Bill Miller says the global bear market and financial crisis has shown how interconnected and correlated the world's economies and asset values are.

"Just as decoupling was wrong on the downside, it almost certainly will prove to be wrong on the upside," he says.

"If it is a bear market rally, it is one we have not seen since the late 1930s.

"Its behaviour is much more like the rally that ended the 1973-1974 bear market, or the one that began off the bottom in 1982, or even that which erupted in March 2003 from the last debt deflation scare."

Miller says this rally has been longer and broader off the bottom, adding fund managers have had fewer chances to invest than the bear market rallies that characterised the post-war period.