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


North American

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


Asia Pacific

Dollar headwinds are fading and the pick-up in global trade is helpful to Asia Pacific


Emerging markets

Stronger earnings and less dollar pressure is positive for the region


Fixed income


Government bonds

We remain negative on conventional sterling and euro bonds. US treasuries are relatively more attractive given the rise in yields we have already seen


Investment grade

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


Emerging market

Selectively, local emerging market bonds offer good interest rate and currency exposure




Absolute: equity

Equity market dispersion should provide opportunities


Absolute: fixed income

Lower liquidity and flatter rate profiles reduce the attractiveness of many strategies


Absolute: macro

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


Precious metals

Gold is attractive as a diversifier, portfolio insurance and an inflation hedge


Industrial metals

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


The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Limited 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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