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.
Markets staged a rally after the disturbing deterioration in sentiment in December in particular. Given the speed of the sell-off, this was perhaps predictable, and we are far from complacent in the face of the challenges ahead.
No changes to our thinking here – our key regional preferences remain the same.
A frustrating one. We can see the possibility of a benign outcome to the Brexit saga, but the risks of increasing exposure seem finely balanced, and for more cautious investors it seems appropriate to reduce client exposure.
Some of the specialist allocations have demonstrated their defensive characteristics and proved helpful in the turbulence of the last quarter. We continue to believe that a challenged growth environment makes the identification of thematic winners all the more important.
US Treasuries have been helpful for portfolios and brought much needed diversification. We continue to remain vigilant about areas of the bond markets where the accumulation of debt since the financial crisis may present problems in the near future.
Commercial property is being further reduced in more defensive and cautious portfolios, given the size of the allocations and the possibility (however small) of a no-deal Brexit. We are still enthusiastic about the prospects for the asset class in the medium term.
Our combination of absolute return, managed futures and structured products forms a crucial part of our cautious strategy across most portfolios.
Cash will be tactically increased in defensive and cautious portfolios following the reductions to UK equities and commercial property.
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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