After deciding to cut fixed income last month, we won’t be making any changes to the asset allocation in November.
No change to our preferences here. Valuations remain elevated in most markets, making a properly diversified range of stocks even more important. China and India account for the bulk of emerging market exposure, with developed markets represented in all major regions as the global recovery continues.
New concerns have arisen over the Brexit deal with the EU, although markets are not disrupted by this for now. Domestic stocks appear to be a decent value, but our positions appear reasonable given the balance of the case in favor of the UK versus its peers.
The theme of the environment should continue to be reinforced by the focus of investors on climate change. The mix of other specialist themes provides access to what appear to be the most likely secular winners in the medium term.
Inflation appears to be becoming more entrenched than the transitory thesis suggests. We have already cut allocations in this area and further action is likely if rate hikes appear likely to materialize at a faster rate than expected.
Real assets appear to be well positioned given the lingering, inflationary worries swirling around the markets. Real estate presents attractive characteristics in this environment and allocations are held at existing levels, as indeed for infrastructure.
Allocations to alternative and protective strategies remain unchanged this month.
We still have some tactical money from our moves last month, but we’re not deploying this time around, so we have more time for thinking.
Mattioli Woods plc published this content on November 18, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on November 18, 2021 01:42:06 PM UTC.