Asset allocation

Current views at a glance - October 2017






There is continued uncertainty over Brexit as well as concern over an increasing consumer squeeze



We are seeing strengthening economic activity and believe equity markets are relatively undervalued, but we are expecting a pause


North American

We've upgraded our rating due to the weakness in the currency and expectations of strong growth and earnings in the second half of the year



We are seeing benefits from a stronger global economy and trade


Asia Pacific

Dollar headwinds are fading and the pick-up in global trade is helpful to Asia Pacific


Emerging markets

Stronger earnings and less dollar pressure is positive for the region


Fixed income


Government bonds

We remain negative on conventional sterling and euro bonds. US treasuries are relatively more attractive given the rise in yields we have already seen


Investment grade

Credit spreads provide some pick-up in yields but we prefer short-dated bonds



High-yield spreads are at a historically tight level so we would be wary of high-yield spread duration exposure



Inflation-linked government bonds remain more attractive than conventional government bonds and give some protection against an inflation shock


Emerging market

Selectively, local emerging market bonds offer good interest rate and currency exposure




Absolute: equity

Equity market dispersion should provide opportunities


Absolute: fixed income

Lower liquidity and flatter rate profiles reduce the attractiveness of many strategies


Absolute: macro

Increased volatility across many asset classes should counter flatter rate cycles



Post-Brexit concerns have resulted in the marking down of property but income characteristics are still attractive


Precious metals

Gold is attractive as a diversifier, portfolio insurance and an inflation hedge


Industrial metals

Ongoing excess supply is likely to weigh on prices for some time



Oil continues to be volatile as politics and supply concerns dominate the market





Cash does not yield much but gives opportunities in periods of weakness


This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

Contact Cazenove Capital

To discuss your DFM requirements, or to find out more about our services and how we can help you, please contact:

Nick Georgiadis

Nick Georgiadis

Head of DFM Team
Simon Cooper

Simon Cooper

Business Development Director