Falling inflation and bond yields see an improving investor mood. We still have plenty of unanswered questions about the global economy and our positioning remains largely unchanged.
OVERSEAS EQUITIES
Smaller companies have enjoyed the rally in the first two weeks of November, as one would expect. To us, the backdrop merits favouring larger names, which can usually better withstand the effects of higher rates and tougher economic conditions, though maintaining our interest in smaller companies for when good news becomes more endemic.
UK EQUITIES
Falling inflation in the UK provides another argument for improving sentiment towards the UK. Small and mid-cap names have perked up and we have warmed to the case for domestic equities but are not adding to our already healthy exposure.
SPECIALIST
In a world where we do not think equity valuations reflect the challenges ahead, we continue to employ a strategy of using themes to allow us to access those sectors and ideas we find most appealing. Energy is the most recent addition.
FIXED INCOME
We are diversifying our government debt exposure by introducing some shorter-dated UK gilts to go alongside US Treasuries. The focus remains on high credit quality across our fixed income exposure. .
PROPERTY
Property has rallied and shown its recovery potential for when interest rates begin to fall. We hold positions.
ALTERNATIVE STRATEGIES
We have a small range of options we like, which bring an extra dimension to portfolios. The environment has posed challenges even for ideas in this space.
CASH
Cash is unchanged this month.
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Investment Line is written and edited by Chief Investment Officer Simon Gibson and Investment Strategist Richard Smith 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.
All content correct at time of writing.
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