Private banker Coutts Bank is advising Asian investors to run a defensive portfolio strategy with high cash and bond allocations in light of the tremendous volatility in equity markets and uncertainty of regional recovery. Chief investment officer Andrew Hutton said the situation over the past nine months was a 'global margin call' in which banks, corporates and private investors were all trying to call back their global investments. He said economies hardest hit by the crisis should try to rebuild their banking systems as soon as possible because they would help serve as a lubricant for recovery. Mr Hutton said while his bank did not underestimate the capacity of corporate restructuring to help Asia recover, it was not expecting a huge recovery in the short term either. Coutts considers the valuation of US equities - currently at an average of more than 20 times - too high in the wake of the forthcoming deceleration in US corporate profit growth. Mr Hutton said his bank's attitude towards investing in European equities was 'sanguine' because while the Continent was still expected to be able to derive productivity gains from ongoing corporate restructuring, the latest round of corporate results had let down some investors. Coutts, wholly owned by National Westminster Bank, has reduced the percentage of assets allocated to equities from 50 per cent to 40 per cent. The amount of assets allocated to fixed-income instruments, on the other hand, has been increased to 55 per cent from 50 per cent.