Visibility on world politics and the global economy remains in short supply and portfolios are positioned for the possibility of negative developments while also being exposed to longer term opportunities.
OVERSEAS EQUITIES
Our preferences remain unchanged. Large cap names seem the safer option at this time of uncertainty, and we are reducing our Asia exposure in some portfolios to accommodate an energy position.
UK EQUITIES
Little change here. The relative attractions of the UK are starting to generate more positive comment from institutional investors and perhaps this will be enough of a catalyst for investor returns. As stated overleaf, the income attractions here are significant.
SPECIALIST
In a world where we do not think equity valuations reflect the challenges ahead, we continue to employ a strategy of using themes to allow us to access those sectors and ideas we find most appealing. Energy is the most recent addition.
FIXED INCOME
We continue to focus on high quality bonds. Sovereign and investment grade exposure remain the best options given the economic backdrop.
PROPERTY
Valuations justify holding allocations though patience may be required for some time yet. Income payouts look well covered, and there is scope for capital value recovery.
ALTERNATIVE STRATEGIES
We have a small range of options we like, which bring an extra dimension to portfolios. The environment has posed challenges even for ideas in this space.
CASH
Cash is unchanged this month. It will be used as and when opportunities occur. No longer a return-free option, the discipline of holding cash in Funds/portfolios remains important.
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Investment Line is written and edited by Chief Investment Officer Simon Gibson and Investment Strategist Richard Smith and is for information purposes. It is not intended to be an invitation to buy, or act upon the comments made, and all/any investment decisions should be taken with advice, given appropriate knowledge of the investor’s circumstances. The value of investments and the income from them can go down as well as up, and you may not get back the amount invested. Past performance is not a guide to future returns.
All content correct at time of writing.
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