Politically-driven or otherwise, we recognise that periods of market volatility are inevitable, and our portfolios are constructed with this in mind. Our positioning is driven by underlying economic and fundamentals rather than short‑term political developments.
As I outlined in my most recent CIO Monthly letter, we invest with a global perspective and are currently neutral on UK equities. That said, we do maintain exposure to the UK equity market, and we currently see more compelling opportunities in domestically focused segments. Our analysis suggests that these areas offer stronger earnings momentum and greater sensitivity to improvements in the UK economy.
In currency markets, we remain overweight sterling. Valuation signals within the ‘Anchor’ component of our robust Anchor & Cycle investment process indicate that sterling is relatively attractive when set against the US dollar currently overvalued.
We also remain underweight government bonds, including UK gilts, reflecting our broader view that persistent inflationary pressures and a resilient growth backdrop support greater allocation to diversifying assets. While past performance is not a reliable guide to the future, assets such as gold and liquid alternatives have historically behaved differently from traditional defensive asset types like bonds, and may provide resilience during periods of market volatility and geopolitical uncertainty.
