We maintain a slight underweight to equities, reflecting a slowdown in the economic scenario and negative momentum.
Valuations have diminished from peaks, but earnings expectations may be too optimistic. As such, we hold an increased stable of diversifiers: cash, government bonds, gold, hedge funds, commodities and a Tail Risk Protection Note.
We favour the UK given its defensiveness, inflation sensitivity and attractive valuations. We have also added a position to 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.
