He added: “Concurrently, UK bank lending suggests a reversal of recent BoE policy, which could mean that Sterling is a strong currency in 2017.”
As a result, Lewis said Tilney will be “sterling bulls” and “gilt bears” in the short term, saying they would prefer treasury bonds which more accurately reflect interest rate expectations.
Tilney have positioned themselves higher in European and Japanese equities and reduced exposure in the US market where equity valuations “look stretched”, Lewis said, while corporate bonds remained a steady call.
High yield continues to be an unattractive prospect, and Tilney continues to hold weight in commercial property as a “long term asset class”.
Overall, Lewis said there had not been a great shift in asset allocation as they were “quite comfortable where they are”.
