IN FOCUS6-8 min read

Portfolio positioning – April 2024

As the global economy becomes less synchronised, the flexibility to allocate between different regions becomes more valuable.



Caspar Rock
Chief Investment Officer

Over the coming year, the US economy is expected to grow at a pace that is roughly in line with its long-term trend. Other economies look likely to grow faster (Japan) or more slowly (China) than long-term averages. Coupled with strong investor preferences for some regions over others, this is leading to stark differences in the performance of financial markets around the world. Last year, for example, Chinese stocks fell by 11% while US stocks gained 27% (based on MSCI country indices). So how we choose to allocate capital between different regions can be an important driver of returns. To take advantage of the opportunity, we have been increasing our allocation to regional equity funds at the expense of global funds.

This has resulted in slightly higher exposure to the US. Its economy has performed remarkably well in the face of higher interest rates and inflation. The outlook remains relatively robust as consumers benefit from rising real wages and possible interest rate cuts later this year. A larger allocation to the US also allows us to take greater exposure to the largest technology companies and the incredible potential of AI.

We retain an overweight position in Japan. Corporate profits are strong, economic fundamentals continue to improve and international investors are buying into the market. As is often the case, the strong performance of Japanese stocks has been accompanied by a weakening of the yen. This means that UK investors have given up some of the returns enjoyed by domestic investors but, even after adjusting for currency moves, Japanese stocks are still +25% higher in sterling terms in the year to mid-March.

Recent changes leave our overall equity exposure in-line with our long-term asset allocation targets. We remain overweight fixed income, with a slight bias to shorter dated bonds that have less interest rate risk. With inflation stabilising and yields still at attractive levels, fixed income continues to offer a compelling opportunity. However, we are mindful that bond market volatility could return if progress against inflation stalls and central banks postpone interest rate cuts. We still see appeal in alternatives and have benefited from this year’s rally in gold. However, we have been trimming our exposure to take advantage of more attractive opportunities in equities and fixed income.

Performance has increasingly diverged since the start of 2023

Price performance of country equity indices

April dialogue chart

Past performance is not a guide to future performance and may not be repeated.

Source: LSEG Datastream, Cazenove Capital, 13 March 2024

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. 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.


Caspar Rock
Chief Investment Officer


The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.