Investment Line is a regular investment bulletin produced by Mattioli Woods plc. The communication provides an update on funds, highlights some of the areas we are currently focusing on, and our thoughts on the issues of the day.
We remain cautious as markets continue to exhibit complacency against a backdrop of high valuations and political risk.
No changes to asset allocation this month with our cautious approach justified by ongoing economic and political uncertainties. We remain broadly invested.
European markets have enjoyed a relief rally but we are not convinced enough to re-invest just yet. The US remains expensive with a lot of hope baked into valuations.
The announcement of (another) General Election has not changed our thinking here – sterling has strengthened for now which might see smaller companies continue to catch up with their larger cap peers; as yet, there is no clear implication of the news. Brexit will remain a tortuous, lengthy and (probably) rather dull process.
Our lack of belief in the case for global growth means portfolios heavily feature specialist allocations where we feel companies can benefit from key themes in the investment universe and are likely to grow irrespective of wider macro-economic developments.
No changes here – we still think the Federal Reserve may be forced to relax its rate tightening timeframe.
We are holding overall allocations for now, continuing to focus exposure on closed-ended funds and regional property, expecting the income to be most of our return in 2017.
We have started to reduce allocations to this area whose attractiveness was flattered by the unusual conditions prevailing in other asset classes. This will be a gradual process and we will target those funds which have failed to explain their disappointing performance last year.
Cash is retained at the levels held previously.
Investment Line is written and edited by members of the Mattioli Woods Group Investment Committee, and is for information purposes only. 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.
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