In particular the firm is focusing on real assets that have revenue streams linked to infrastructure backed by governments. They constitute sound defensive investments in a stressed macroeconomic scenario, Architas said.
“More broadly, we believe that investors need to expect an increase in volatility over the coming months,” he said.
Although markets look gloomy investors should avoid overreacting, in Rock’s view. “Right now, investors know the market is struggling but most believe it will come back. In fact, many see this as a buying opportunity,” he said.
Meanwhile Architas is maintaining some exposure to longer duration bonds as a hedge against a potential global growth shock, according to Rock. Architas moved to a neutral position on equities, down from a slight overweight, maintaining a bias towards developed markets and defensive sectors.
Rock said there doesn’t appear to have been a major shock to trigger the current bear market and UK underlying positive fundamentals don’t seem to have changed. “We are not experiencing an economic crisis and there is no major monetary tightening on the horizon; the bear market may have been precipitated by internal market dynamics,” he added.
