Current views at a glance - November 2017
There are concerns over ongoing economic strength in light of Brexit overhang and that the tailwind from weaker sterling may be in the past
We are seeing strengthening economic activity and believe equity markets are relatively undervalued, but we are expecting a pause
A fuller valuation is offset by weaker USD and good earnings growth
A better global economy is helping Japan but the domestic economy is still disappointing
The pick up in global trade is helpful to Asia Pacific
Modest but synchronised global growth should be more supportive to Emerging Markets
We remain negative on GBP and euro bonds but US Treasuries are becoming more attractive given the normalisation of yields that has taken place
Credit spreads has provided some pick-up but we prefer short-dated bonds
High-yield credit spreads are at a historically tight level so we would be wary of high-yield spread duration exposure
Recent gains in inflation-linked government bonds reduce their valuation attractiveness but they are still desirable from an improving economic perspective
Selectively, local emerging market bonds offer good interest rate and currency exposure
Increased volatility and dispersion should provide opportunities
Absolute: fixed income
Lower liquidity and flatter rate profiles reduce the attractiveness of many strategies
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
Gold is attractive as a diversifier, portfolio insurance and as an inflation hedge
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 has defensive and opportunistic qualities in uncertain and volatile markets
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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.