Investment Clock insights

GMAP asset allocation: where we stand


Nersen Pillay, Investment Director

27 September 2017

 

Multi asset: overweight equities and high yield; underweight bonds
We have been overweight equities since 2012 given the environment of continued global recovery and loose interest rate policy. 
We added to stocks in August during the dip caused by political tensions between the US and North Korea. Stocks have rallied since then and we’ve taken some profits at the margin but remain moderately overweight equities.
We remain underweight government bonds, although less so than of late. Quantitative easing and pension fund buying have pushed yields to levels that make no sense in the long run, but inflation pressures are peaking.
We are neutral to slightly overweight UK commercial property. A positive supply/ demand backdrop and a rental yield cushion should make UK property resilient; it has proven to be so since the Brexit vote. 
We are slightly underweight commodities due to the negative roll return in those markets.
Equity Regions: overweight emerging markets and Japan; underweight UK
Emerging Markets and Japan: we are overweight as they both benefit from continuing global growth.
We are underweight UK equities as earnings trends are less favourable and the economy is facing the beginning of monetary tightening and Brexit uncertainty.

Multi asset: overweight equities and high yield; underweight bonds

We have been overweight equities since 2012 given the environment of continued global recovery and loose interest rate policy. 

We added to stocks in August during the dip caused by political tensions between the US and North Korea. Stocks have rallied since then and we’ve taken some profits at the margin but remain moderately overweight equities.

We remain underweight government bonds, although less so than of late. Quantitative easing and pension fund buying have pushed yields to levels that make no sense in the long run, but inflation pressures are peaking.

We are neutral to slightly overweight UK commercial property. A positive supply/ demand backdrop and a rental yield cushion should make UK property resilient; it has proven to be so since the Brexit vote. 

We are slightly underweight commodities due to the negative roll return in those markets.

Equity Regions: overweight emerging markets and Japan; underweight UK

Emerging Markets and Japan: we are overweight as they both benefit from continuing global growth.

We are underweight UK equities as earnings trends are less favourable and the economy is facing the beginning of monetary tightening and Brexit uncertainty.

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.