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(Bloomberg) -- Credit Suisse Group AG, the world’s sixth-largest wealth manager, is advising clients to take a pause from investing in stocks.

“We think that now is a good time to review equity portfolios, lock in some gains and protect investments,” Nannette Hechler-Fayd’herbe, the bank’s director of investment strategy and research, said in an interview in Zurich on Thursday, adding that she isn’t telling clients to sell. “Generally it’s hard to predict political risks -- we don’t know what it’s going to be.”

Credit Suisse’s recommendation to wealthy investors to consider portfolio allocations came ahead of a slide in stocks on Friday triggered by mounting concerns about U.S. policy and after terrorists struck a crowded tourist street in Barcelona, killing 13 people. The worries are worsening the mood for traders after last week’s escalation of tensions on the Korean peninsula.

Credit Suisse is keeping a neutral stance on equities but voicing some concerns over its valuations: stocks should continue to rise, the bank said in a separate monthly investment letter, but “valuations seem full.” Low volatility could present an opportunity for investors to protect realized gains making use of option strategies, it said.

Volatility indices spiked recently but are still bouncing around historically low levels. The CBOE Volatility index - a key measure of U.S. market volatility - stood at around 10 for most of the year, while the long-term average of the index is closer to 20.

Switzerland’s second-largest bank, along with other rivals including UBS Group AG and Julius Baer, is struggling with muted client activity as the very wealthy hold more cash than was traditionally the case, amid fears that valuations across asset classes remain stretched.

“What I see for instance is that clients are ready for rotation," Hechler-Fayd’herbe said, citing a move within equities from broader indices to longer-term investment themes such as clean energy.

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Namitha Jagadeesh

©2017 Bloomberg L.P.

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