We maintain a slight underweight to equities, amidst elevated recession risks.
Valuations remain elevated, 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 UK large caps given their defensiveness, inflation sensitivity and attractive valuations. We maintain 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.
