We maintain a slight underweight to equities, reflecting a slowdown in the economic scenario and negative momentum.
Valuations appear fair, but earnings expectations may be 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.
