“The markets were once again surprised by political developments with Donald Trump’s election as US President giving a boost to US growth prospects but raising concern about inflation. We are moderately overweight equities but have tilted regional exposure towards Japan, which tends to do well when the dollar is strong, and away from Europe, an area likely to see increased political uncertainty over the next year as markets navigate the Italian referendum and important elections in Holland, France and Germany.
We remain underweight in bonds and have further reduced our exposure, trimming weightings in credit as well as government bonds. Commodities have been the best performing major asset class this year in sterling terms. Our positioning remains broadly neutral, with stronger growth in China balanced by the headwind for the asset class created by US dollar strength. We are also neutral on UK commercial property where concerns over a likely slowdown in the economy in 2017 are balanced by our expectations that additional fiscal stimulus will be forthcoming as needed."
You can access up to date views from Trevor on the market and the movements of the Investment Clock on our Latest Investment Clock updates page.
|Absolute Return Strategies
Directions of arrows show overall change from previous tactical change. For individual portfolio changes, please see factsheets.