Caspar Rock: 2019 first quarter update

We see slower growth in 2019 but the Fed’s policy shift should support markets. Politics remains the key near-term risk.



Caspar Rock
Chief Investment Officer

Positive returns across the board in the first quarter

Emerging market and technology stocks performed particularly strongly in the first three months of 2019. Bonds also rallied, supported by low inflation and a sharp change in tone from the Fed.

Looking ahead: slowdown but no recession

Though growth is slowing, we do not expect a recession this year. Lower oil prices and rising wages will support consumer spending, while a US-China trade deal should boost business confidence. Furthermore, the Fed said it no longer expects to raise interest rates this year. This clear change in policy has eased concerns about interest rates rising too far too fast. 

Key risks for 2019: politics and inflation

Equity markets would be unsettled by a “no-deal” Brexit or the failure of the US and China to reach a trade deal. A pick-up in inflation over the course of the year would cause equity and bond investors to question the Fed’s changed stance, resulting in higher volatility. 

Positioning little changed

Our positioning has not changed substantially over the course of the quarter. We remain neutral on equities and underweight bonds due to low absolute yields. We have marginally reduced our risk exposure as asset prices have risen over the last three months.

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. 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


Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at IFC1, Esplanade, St Helier, Jersey, JE2 3BX, (No.31076).

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.