VIEW-Fortis betting on risky assets in 2009

By Anne Jolis

BRUSSELS (Reuters) - Fortis is betting on risky assets in 2009 recommending equities for the short-term and corporate bonds longer-term, said William De Vijlder, global chief investment officer at the financial group.

"I think risky assets in general - equities, corporate bonds, convertibles - will see support going into the new year," said De Vijlder.

Due to the forced selling and deleveraging spurred on by the credit crunch, these assets are likely well undervalued, De Viljder told reporters at a press conference on Monday, and their rallies should be dramatic. For compliance reasons, he declined to cite specific stocks.

"If there's one message to give to everybody, it's make sure you don't miss out on the rally," De Vijlder said, adding that Fortis is slightly overweight on equities for the short term. "We think equities will be supported in the upcoming weeks."

Fortis predicted that equities will yield an average return of 15 percent or more over 2009.

"Don't underestimate the impact of the forced selling," said De Viljder. "Equities markets did not decline because they were overvalued."

De Viljder noted that although Fortis is nervous about emerging market equities in the short-term, longer-term they are attractive and should respond to structurally higher growth and lower debt, perhaps yielding a rise higher than the 15 percent average. De Vijlder said he doesn't see much difference between U.S. and European equity returns.

Longer-term, equities will probably remain volatile, De Vijlder said, with defaults set to continue and analysts likely to keep slashing earnings forecasts in the coming months. Markets are not likely to recover sustainably before at least the second half of 2009, he said.