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 have not made any changes to portfolios this month, so our end of year asset allocation thoughts are as follows, reflecting some of the key risks on the investment horizon.
We have no direct European equity exposure in portfolios and remain underweight US equities. Japan remains one of our preferred areas, and we hold more elsewhere in Asia, including in China and India.
We continue to run with relatively low levels of UK equity exposure. The largest companies appear to be beneficiaries of sterling’s weakness against the US dollar, and we are generally underweight there compared to lower down the cap scale. We believe 2017 will see more on Brexit, and this brings with it plenty of uncertainty.
Healthcare looks attractive and is owned across most portfolios. Our confidence in infrastructure also means this is held across the board. Gold continues to merit inclusion, given the pressures in the global currency system and as an insurance against economic and political risk generally, including inflation.
As above, if higher inflation does come through in the UK, we might expect certain assets here to suffer. We do not own gilts, which has played well for us in recent weeks.
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.
Absolute return funds offer a variety of strategies, and to maximise risk-adjusted returns we are adding an allocation to structured products, which diversifies risk and should keep volatility lower than might otherwise be the case.
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.
Mattioli Woods plc is authorised and regulated by the Financial Conduct Authority.
