We maintain a slight underweight to equities amidst elevated recession risks.
Valuations have edged higher, and earnings expectations remain too optimistic. As such, we hold an increased stable of diversifiers: cash, government bonds, gold, hedge funds and a Tail Risk Protection Note.
We favour the UK given its defensiveness, inflation sensitivity and attractive valuations. We have also added to our position in real assets, such as infrastructure, for inflation sensitivity, diversification and yield.
Environmentally-linked policymaking, legislation and consumer behaviour are irreversible. We favour companies that are contributing positively to these long-term themes.
