Happy New Year! We hope that you have had a wonderful break over the festive season and are looking forward to 2018.
For the second year running we have been positively surprised by the resilience of markets, with near record low levels of volatility across asset classes, as well as indices at or near all-time highs. Although valuations appear lofty, we still see positivity in many areas including Europe, Japan and Asia.
Over the last quarter, higher rated bonds performed better than most in Fixed Interest, but we maintain our low interest rate sensitivity stance to protect capital whilst collecting a handsome yield. Global growth and continued Quantitative Easing (QE) should help to support fragile bond-issuers, but we remain selective in the credits we are exposed to.
Our considered equity allocation proved beneficial over the period as our higher conviction areas provided the best performance. We remain underweight UK as we perceive that there are better opportunities elsewhere which we expect to continue over the next quarter.