Our expectation for weakening economic and earnings growth prospects underscores our current unchanged positioning. We still hold more US, Eurozone, and UK government bonds relative to our long-term allocation and are less exposed to riskier bonds.
We also hold fewer equities relative to our long-term asset allocation. The majority of those we hold are large, high-quality companies. This includes so-called low volatility companies across the US and Europe, which have fallen less than the broader market in recent weeks.
We’re keeping a close eye on market developments, particularly potential opportunities from certain equity markets that have fallen by around 10% since their peak in late July 2023.
Data as of 01/11/2023. The Yield and P/E figures for stock markets respectively use 12m forward dividends and earnings divided by the index’s last price. For bond markets, the yield to maturity is used.
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Bloomberg does not approve or endorse this material or guarantee the accuracy or completeness of any information herein, nor does Bloomberg make any warranty, express or implied, as to the results to be obtained therefrom, and, to the maximum extent allowed by law, Bloomberg shall not have any liability or responsibility for injury or damages arising in connection therewith Note: Past performance is not a reliable indicator of future returns.
