According to Simon Brett, chief investment officer at the wealth manager, there are a great deal more questions than answers at the moment, and as a result it made sense to pair back the firm’s risk exposure.
“We have moved neutral on equities. There is a lot of political uncertainty at the moment. Not only are there are questions around whether or not negative rates are working in Japan and the EU, but there is also the Brexit debate and worries over the US election,” Brett said.
While neutral overall, the firm is underweight the UK and the US, a market that Brett says is looking quite expensive. It is neutral on emerging markets and, is still overweight Japan and the EU.
Brett said the firm has also trimmed its exposure to commercial property overweight from double to single overweight.
On the fixed income side, the firm is overweight corporate bonds, neutral on index-linkers and has a slight underweight to gilts.
“Stock markets face a lot of uncertainty at the moment, so we have decided to wait and see what happens with Brexit, with China and with the US elections.”
Asked what is needed for the firm to move back overweight, Brett said: “What we really want is just a little more clarity across the board.”
