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.
After moving to reduce fixed income last month, we are not making any changes to asset allocation in November.
No changes to our preferences here. Valuations remain high across most markets making a range of properly diversified equities even more important. China and India represent the bulk of the emerging markets exposure with developed markets represented across all the main regions as the global recovery continues.
New concerns have surfaced over the Brexit deal with the EU, though markets are unfazed by this for now. Domestic equities look to be decent value, but our positions seem sensible given the balance of arguments for the UK relative to peers.
The environment theme should continue to be bolstered by investors’ minds being focused on climate change. The blend of other specialist themes offers access to what appear to be the most likely secular winners on a medium term view.
Inflation does look like becoming more entrenched than the transitory thesis suggests. We have already trimmed allocations in this area and further action is likely if rate rises look likely to materialise at a faster pace than previously expected.
Real assets look well positioned given the persistent, inflationary concerns which are swirling around markets. Property has attractive characteristics in this environment and allocations are held at existing levels, as indeed they are for infrastructure.
Allocations to alternative and protective strategies remain unchanged this month.
We still have tactical cash from our moves last month but are not deploying this time round, allowing ourselves more time for reflection.
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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