Should you hold back on cyclicals after 2012's early rally?

Fund managers were already warning against buying into cyclical stocks including miners and financials ahead of this week's sell-off, urging investors to hold off until there is a clearer entry point.

As sentiment recovered in the early part of this year, global equity managers ramped up their cyclical exposure across the board, but last week's drop in US employment numbers has called into question the sustainability of the US rebound, suggesting a move into cyclicals now would be premature. A division is forming among investors over the optimum time to buy back in, with some eager to return to banks and miners now and others waiting in the wings. Cyclical sectors have performed strongly so far this year. Mining stocks in the FTSE 100 have collectively returned 6.1%, while banking ...