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 with the first cracks in the growth narrative starting to show.
Global equity markets appear to be running out of steam after a strong run – Europe has attracted decent fund flows, but we still see a poor risk/reward return there.
We continue to expect the UK to face headwinds from Brexit-related newsflow – there will be select opportunities here, and we continue to prefer the small cap opportunity set.
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.
Fixed income may benefit from renewed uncertainties over the ability of the Federal Reserve to raise rates quickly. We are adding modestly to high yield in some portfolios.
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 that 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.
Mattioli Woods plc is authorised and regulated by the Financial Conduct Authority.
