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
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
Dollar headwinds are fading and the pick-up in global trade is helpful to Asia Pacific
Stronger earnings and less dollar pressure is positive for the region
We remain negative on conventional sterling and euro bonds. US treasuries are relatively more attractive given the rise in yields we have already seen
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
Selectively, local emerging market bonds offer good interest rate and currency exposure
Equity market dispersion should provide opportunities
Absolute: fixed income
Lower liquidity and flatter rate profiles reduce the attractiveness of many strategies
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
Gold is attractive as a diversifier, portfolio insurance and an inflation hedge
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
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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.