“Global equity markets pulled back a bit in September on weaker US economic data. Bond yields rose as the limited spill over from the Brexit shock led investors to doubt the degree of global monetary policy ease that will be forthcoming in the coming months. With the world economy expanding and inflation low, we remain moderately overweight equities and underweight bonds. We are broadly neutral commodities with positive demand developments currently balanced by excess supply.
We have added to the overweight in Asian and emerging market equities on the view that stronger data out of China and a relatively soft US dollar will encourage further outperformance. We funded the move by taking US equities to a small underweight. We remain overweight Japan and underweight Europe. While remaining underweight bonds to the same degree in aggregate, we sold index-linked gilts, moving the money primarily into conventional gilts and corporate bonds. This reverses a position we adopted ahead of the UK referendum that has added value as sterling weakness caused a rise in inflation expectations.”
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.
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Directions of arrows show overall change from previous tactical change. For individual portfolio changes, please see factsheets.