We are moving to add risk in portfolios, though in a focused and measured way given some remaining uncertainties.

3 minutes

We are moving to add risk in portfolios, though in a focused and measured way given some remaining uncertainties.


Europe is introduced for some of the more growth-oriented portfolios. There are opportunities to be found elsewhere, but a bit more patience should ensure this is done in exactly the right places. We are holding onto our various overseas exposure, as relatively few (maybe the US is the exception) look expensive.


We have seen enough here to add to exposure for balanced and higher risk investors. This year is going to be as difficult at home as it is elsewhere, maybe more so short term, but the removal of the Brexit headwind and the success on the vaccine front mean the risk-reward trade-off justifies modestly increased allocations. We do especially like smaller companies.


Our preferred themes remain unchanged – for some investors we have continued to build our environmental equities exposure. Healthcare allocations are modestly trimmed for the most adventurous investors.


Doubts over the degree of diversification to be obtained from fixed income remain, though our spread of assets is very wide here. We are adding convertible bonds for lower risk investors as a step towards increased risk but without going fully into increased equity exposure.


Allocations remain unchanged – a rapid vaccine rollout and recovery would be of tremendous help in the short term. Our diversification by sector should provide support.


We continue to look for interesting ideas in the space; this aids true diversification and portfolio construction.


Cash positions are reduced across most portfolios, albeit modestly. Cash held remains ‘dry powder’ and when government bonds offer so little, there is little opportunity cost.



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.

Mattioli Woods plc is authorised and regulated by the Financial Conduct Authority.

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