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 have remained in upbeat mood since Christmas but will at some point factor in worries about the slowdown in global growth. We remain cautious.
No changes to our thinking here – our key regional preferences remain the same.
A no deal Brexit can no longer be dismissed – the UK may present an incredible contrarian opportunity, but the risks are too great for now, and better value may emerge.
We continue to believe that a challenging long-term growth environment makes the identification of thematic winners all the more important.
We have taken the decision to hedge the dollar exposure of our US Treasuries position. This, plus a renewed confidence that the Federal Reserve will not be able to raise rates any time soon, has encouraged us to increase the duration (or interest rate sensitivity) of our holdings. This presents the opportunity for greater capital gains in the event of reductions in interest rate expectations and gives the potential to further offset the hedging costs.
Still offering excellent income opportunities, but the Brexit uncertainty has tempered our enthusiasm to some degree. We maintain our positions here.
We continue to move towards lower volatility vehicles for more defensive clients. Overall, these strategies form a crucial part of our cautious strategy for investors.
Cash remains high for lower risk clients, and this seems sensible given the balance of risks in the markets.
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.