The manager of the Schroder Global Equity Income fund says a positive outcome from the private sector involvement (PSI) talks between Greek and core European leaders could result in a more sustained global equity rally.
"If we have positive news on the matter, and Greece can secure another bailout package, this will be very positive for the markets," she said.
"It would be too premature to say the eurozone crisis would then be over, as there is no easy long-term solution to Greek’s debt; however, if these tail risks are pushed to one side, the endgame will have been postponed for a long while, and there is potential for equities to do very well."
Laud has already been rewarded for adding more cyclical stocks to her portfolio in recent months, at the expense of safer defensive companies that did well in 2011. In October, Laud removed both McDonald's and Bristol-Myers Squibb in favour of more economically sensitive names such as BMW, BNP Paribas and Deutsche Bank.
"McDonalds is still a fantastic company – my decision to take it out of the portfolio was purely based on valuations; certain banks and manufacturers were just too cheap to ignore," she added.
According to FE Analytics, Schroder Global Equity Income is up 11.75 per cent over a three-month period, meaning it has already recouped the losses it sustained in the August downturn.
Performance of fund vs sector and index over 1-yr
Source: FE Analytics
Laud says she will have no hesitation in adding to her cyclical weighting if European talks stay on track – although she stresses that only dividend-paying companies would make it into her portfolio.
"The market has clearly underestimated the impact of Mario Draghi’s [president of the European Central Bank] three-year financing programme," she said. "PMI data coming out of Europe yesterday was OK, but crucially there was no deterioration. The numbers coming out of China and the US have also been better than expected."
"The banking situation in Europe is much improved, with many saying they have covered their financing for 2012 and 2013."
"It’s important that positive growth continues and, if the euro keeps falling against the dollar, this will help exporting nations in the eurozone to prop up their reserves and take stress away from the periphery."
While Laud says it is difficult to second-guess the actions of European leaders, especially given their recent track record, she doubts that Greece will be allowed to default at this stage. Last week, German chancellor Angela Merkel said talks with Greece were on a ‘good path’, and there were rumours among the press this morning that an agreement has already been made.
However, the manager says she is equally ready to cut back on her cyclical exposure if things take a sudden turn for the worse.
Laud’s fund has returned 0.6 per cent since it was launched in May 2007, underperforming its MSCI World benchmark by around 7 per cent. However, her record in the shorter-term is much improved.
The fund currently has a one-year historic yield of 4.3 per cent, compared with 2.8 per cent from its benchmark. Laud says she expects the yield to increase slightly this year, even though she has cut down on her exposure to higher yielding stocks in recent months.
Back in October, 65 per cent of the portfolio was invested in stocks with a yield greater than 4.1 per cent; this figure is now down to 50 per cent.
"Global companies have a huge amount of cash on their balance sheets at the moment, which means my investment universe is growing," she explained.
"Around 50 per cent of the companies on the MSCI World index are paying higher dividends now than they ever have done before."
The Schroder Global Equity Income fund has a total expense ratio (TER) of 1.69 per cent, and a minimum investment of £1,000. Laud managed the Schroder Income Growth investment trust between August 2006 and June 2011.