Concerns over fixed income lead to further reductions and this month also sees some movement around equity allocations.
OVERSEAS EQUITIES
All global markets face challenges from valuation levels, uncertainty over inflation, central bank policy and Covid-19 developments. Some portfolios will see increased European, US and Japan allocations as a result of fixed income being trimmed.
UK EQUITIES
The UK economy soldiers on with a cautious eye on what could be a difficult winter period. Despite a strong post-Brexit run, the market looks inexpensive compared to most but a catalyst for a further uplift may not materialise as we battle with inflationary pressures and rate increases.
SPECIALIST
The environment theme continues to show excellent long-term promise and we are continuing to build positions in portfolios.
FIXED INCOME
The inflationary story is looking more secure (although the ultimate outcome is far from a done deal) and as a result we have made further reductions. Sales are mostly from Treasuries though investment grade and other areas have also been impacted in places.
PROPERTY
Real assets look well positioned given the inflationary concerns which are swirling around markets. Property has attractive characteristics in this environment and allocations are held at existing levels, as they are for infrastructure.
ALTERNATIVE STRATEGIES
Allocations to alternative and protective strategies remain unchanged this month.
CASH
The reductions in fixed income mean that tactical cash positions are slightly increased with a view to our redistributing these funds in the coming months.
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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