With business confidence picking up in major economies and policy loose we have added to the moderate overweight in equities. Political risks will remain a factor in 2017 but with economic activity accelerating we would probably view a correction as a chance to buy at lower levels.
We recently moved modestly overweight in commodities. The improvement in Chinese growth coupled with a reduction in stockpiles should boost returns although US dollar strength may be a headwind. We remain underweight bonds.
Japan is our favourite equity market on the basis of reflationary fiscal and monetary policy and a tendency to do well when the dollar is strong. We have been trimming emerging market exposure for some time and are now broadly neutral. The new US administration and stronger dollar are a significant source of uncertainty. We are underweight in the U.S. and in Europe.
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.