Despite another good three months for cyclical assets, we are sticking with them within our Model Asset Allocation. We make minimal changes, with a reduction in the allocation to highyield credit (to Underweight) and a corresponding increase to equities (going further Overweight). Real Estate and equities remain our favoured cyclical assets, while cash is our diversifier of choice. We boost allocations to emerging market (EM), Japanese and UK assets, with an overall preference for UK and EM assets.
In our view:
Our best-in-class assets (based on 12m projected returns)
Recent history has shown that protectionist measures such as tariffs can hinder economic growth in the near term but don't necessarily create a long-term hurdle for markets.
Welcome to Uncommon Truths, Paul Jackson and Andras Vig’s regular in-depth look at the big topics impacting markets.
Will US inflation rise? Are tariffs a concern? With the new year and a new Trump administration, investors have questions about the economy and markets.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Data as of 31 May 2021 unless stated otherwise.
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Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.
