Lyttleton: Financials attractive but uncertainty remains

Regulatory issues are holding BlackRock's Mark Lyttleton back from increasing exposure to financials, as he says valuations look attractive.

Lyttleton, who manages the £1.5bn UK Dynamic Fund, has a 17.4% weighting in financials and is more optimistic about prospects for banks but there is still uncertainty over future regulation. He says: "We don't think the bank sector is un-investable; on the contrary, we think there are some quite interesting opportunities, it's just a matter of timing them correctly." He adds: "Over time it will become more apparent what's going on with more of the solvency issues and you get more clarity from regulators about capital . "As time goes by the banks work through some of their bad debts...