Webinar: The economic recovery continues
We remain cautiously optimistic on equities and expect inflation to moderate in the second half of the year
- Global growth remains remarkably strong, but the rate of growth may now have peaked.
- We still expect equities to deliver positive returns and maintain our overweight exposure to the asset class. However, performance may not be as strong as it has been so far this year and there could be periods of volatility.
- While equity markets look expensive, this doesn’t mean they can’t continue to generate attractive returns.
- Strong earnings growth this year means that valuations are looking much more reasonable than they were coming into the year.
- We have looked at previous periods where markets appeared expensive based on long-term measures and found that very often they have continued to perform well.
- Evidence continues to suggest that this year’s rise in inflation will be transitory. Core inflation, which excludes energy and food prices, remains contained. However, we could see inflation start to rise again later next year.
- We continue to like “value” sectors within the stock market, with a preference for higher quality companies.
- We retain the defensive holdings within our portfolios. Given the risk of higher inflation, we prefer defensive assets that offer inflation protection such as gold and inflation-linked treasury.
Watch the video above to find out more.
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.