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 focusing on, and shares our thoughts on the issues of the day.
The global economic backdrop could hardly be said to be improved, and some of the long-term challenges for markets may have to be addressed sooner rather than later. Our view remains fundamentally cautious, but our optimism in some areas leads us to remain fully engaged and participating in markets.
The problems facing China and the global economy do leave Asia looking exposed, so we have moved to reduce some of our significant exposure here.
The valuations may look tempting, but the market is justifiably concerned that the political risks facing the UK will not result in an attractive outcome.
These allocations could be crucial differentiators as we enter a period of slower global growth.
Despite being expensive on some metrics, index-linked gilts offer an interesting way of hedging some of the UK risk in portfolios for more cautious investors. Elsewhere we continue to upgrade the quality of our fixed income exposure, removing the Indian bonds holdings and adding to broader EM and short-dated investment grade bonds.
It is appropriate that property exposure is trimmed for defensive and cautious investors given the uncertainties facing the UK economy.
Our scepticism over the ability of some absolute return vehicles to deliver consistent performance sees us reduce exposure, with index-linked gilts benefiting.
Modest increases here in some portfolios with the reduction in Asia adding to cash levels.
Investment Line is written and edited by members of the Mattioli Woods Group investment committee 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.
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