SNAPSHOT2 min read

Kieron Launder: 2019 second quarter update

Low levels of inflation and low interest rates are supportive of higher valuations. They also suggest growth equities will continue to outperform.

12/07/2019
London-City-at-spring

Authors

Kieron Launder

Risk assets and safe havens both benefit from easier monetary policy

Equities, government bonds and gold all rallied during the second quarter. The key driver of the strong performance across asset classes was the prospect of interest rate cuts from the Federal Reserve.

Valuations not extreme given current inflation environment

While valuation multiples look high compared to the overall historical average, they are less so when compared to periods with similar levels of inflation. 

Lower interest rates supportive of growth equities

High growth companies offer the prospect of big profits in the future. When interest rates are low and growth is scare – as is the case today - investors are more willing to back companies that promise jam tomorrow.

 

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.

 

Authors

Kieron Launder

Topics

Quarterly Report
Snapshot
Economic & Strategy Viewpoint
Video

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 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

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