With global growth indicators peaking, markets could encounter some volatility over the summer. We maintain a small overweight position in equities and have added to positions in global high yield as a lower risk way of getting corporate exposure.
Recent signs of weaker economic activity in China have led us to trim overweight positions in commodities, emerging markets and the Australian dollar. We expect Chinese growth to remain strong through the October party congress but a reversal of recent tightening moves may be required. We have added to European equities and the euro.
The political outlook is more stable and European growth indicators continue to improve. We are buying index-linked bonds to reduce the size of the underweight positions in funds. Yields have risen since the announcement of a snap UK general election, but a fading of global growth and inflation indicators suggests limited upside in yields with some risk of a sudden downward move should stock markets encounter volatility.
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 (including cash)|
Directions of arrows show overall change from previous tactical change. For individual portfolio changes, please see factsheets.